After the Union Budget India's very own official digital currency is likely to debut by early 2023, which will mirror any of the currently available private company-operated electronic wallets, but it will be a sovereign-backed facility. The digital currency issued by the RBI would be numbered in units, just like every fiat currency has a unique number.
The RBI has indicated the digital rupee would be ready by the end of next financial year. The digital rupee blockchain, being developed by the Reserve Bank, would be able to trace all transactions, unlike the current system of mobile wallet offered by private companies.
Using electronic wallets offered by private companies, people currently transfer money to the private company who holds the money on his/her behalf and pays to a merchant when there is any transaction.
As per the experts, if the money is transferred to the e-wallet of a private company, then credit risk of that company is also attached to the money besides charges levied by such companies. The exact regulation governing this Central Bank Digital Currency (CBDC) is yet to be finalised.
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