Mint Explainer: Why central banks are building digital currencies
- CBDCs could widen inclusion, increase trust and take the sheen off private cryptocurrencies.
The Reserve Bank of India (RBI) has kicked off a pilot run of its wholesale central bank digital currency (CBDC), which will be followed by a test of its retail CBDC. Unlike volatile cryptocurrencies, a CBDC is seen as a trusted and transparent way to transact digitally. CBDCs also hold the potential to disrupt the digital payments ecosystem in India and the world. It could emerge as an alternative to mobile money in the future, possibly competing with the likes of Paytm and Google Pay.