Central Bank Digital Currency (CBDC) will not eliminate physical banking but enhance the digitisation of traditional banking, said Dinesh Kumar Khara, Chairman, SBI, in an interview with ET Now.
"Some part of the digitisation has already been seen in the banking system, so it will be parallel to whatever was happening. Even now, it is not that it is going to eliminate physical banking. That will continue and digital banking is a part of our banking system currently also. I think it will only get further enhanced, that is all," he told ET Now.
The SBI Chairman said CBDC is addressing the need for additional currency in the economy as the need for a digital currency is getting addressed through it.
“Essentially, it is addressing the need for additional currency in the economy. Perhaps the Indian economy has taken a very definite step and is making a very strong step in that direction. It will certainly be useful because whatever need was felt for digital currency, it is getting addressed through the CBDC, a regulated currency. The RBI has got a complete stock of the currency for an emerging economy,” said Khara.
As Mint reported earlier, government securities worth ₹275 crore were traded using the RBI CBDC on Tuesday, November 1, on the first day of a pilot project in the wholesale segment.
The RBI has started a pilot run of its wholesale 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,” reported Mint.
Disclaimer: This article is based on an ET Now interview published by economictimes.com and Mint articles. The views and recommendations given in this article are those of the analysts. These do not represent the views of MintGenie.