Key Points
- Shaktikanta Das said the future of money has to be digital.
- CBDCs will enable quick and low-cost international transactions.
- Cooperation among countries is crucial for creating CBDCs and their legal guidelines.
- He mentioned possible risks with CBDCs, such as sudden financial shocks and volatility.
- Das assured that CBDCs and UPI can work well together.
- UPI transactions are expected to hit 1 billion per day next year.
Looma News
During the G30 Annual International Banking seminar in Washington DC, Shaktikanta Das, the Governor of the Reserve Bank of India, stated that the future of money has to be digital. He called for countries to team up to promote the use of central bank digital currencies (CBDC), especially for cross-border payments. Das mentioned that CBDCs could make transactions quicker and cheaper by cutting out middlemen.
He stressed the need for collaborative work on designing CBDCs and their legal frameworks to ensure they succeed. While acknowledging that CBDCs could improve transaction speed, he also warned about the risks, such as rapid economic shocks and potential instability in capital flows. He encouraged looking into technological solutions to handle these issues.
Das clarified that while CBDCs act as a currency, UPI is a payment system. He confirmed that both could work together and support each other during crises.
Looking to the future, Das expressed confidence in UPI, predicting it would exceed 1 billion transactions per day next year, up from around 500 million currently. Since launching India’s digital rupee in 2022, the central bank plans to make CBDCs available by allowing non-bank payment providers to offer CBDC wallets, alongside the growing use of UPI.
