CBDC Fails To Impress Bankers In India
Probably you think bankers will love to use Central Bank Digital Currency (CBDC), but CBDC fails miserably to impress bankers in India during the pilot wholesale program. It was assumed bankers would welcome CBDC and explain how good CBDC is to operate banking activities.
The Reserve Bank of India (RBI) launched Central Bank Digital Currency E-rupee pilot wholesale program on November 1, 2022. In this testing phase, bankers use E-rupee in their operations. It increases their workload but does not bring any extra benefit.
It is intended to use in interbank trade settlements. They need to work more to do that while it fails to give additional benefits. When you work and take more responsibility, you expect to have benefits. If you have to work more doing something without having any extra benefits, you will not be interested to put your effort into that.
Not only India, many countries are working hard to launch CBDC. Some countries already started their CBDC pilot program to experiment and see the results. CBDC is supposed to be fast, easy, and better. This is good, but the question is good for whom.
CBDC is good for the central authority. They can directly control different aspects of the financial system. I thought bankers might give positive feedback using CBDC. It will be interesting to see how bankers view CBDC in different countries.
We will get more news about the development and releasing CBDC in 2023. It might not be easy to implement something when most people go against that. Being a crypto enthusiast, you cannot be a fan of CBDC.
Net banking is there and it does its job pretty well. According to the bankers' opinion, the digital rupee or E-rupee is similar to net banking, they get used to using net banking and are satisfied with that.
They also added that E-rupee will provide benefits to the consumer and retail sectors. The Reserve Bank of India (RBI) already started the E-rupee pilot program in the retail sector on December 1, 2022.
We hear cool slogans like CBDC will make things faster, and better, strengthen the economy, and bring revolution in the finance sector. Time will say how everything will evolve and how people will react to that.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
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Reference: 1.
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The banks don't like CBDC's because it gives the government more control over the money. So in a way, they prefer the old system where they have control and they can do whatever they want.
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Bankers don't get advantages using CBDC except increasing accounting workload and having more pressure. That's an interesting finding. Let's see how bankers in other countries react when the central bank rolls out CBDC.
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I am hoping that it doesn't go that well but I have a feeling that it will still be implemented regardless. The faith in the currency is going to be the deciding factor because it's not going to change how confident people are in that currency.
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