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Central Bank Digital Currency

Central bank digital currencies (CBDCs) are digital forms of sovereign currency issued by central banks. There are two main types - wholesale CBDCs for use between banks and retail CBDCs for use by consumers and businesses. As more countries explore CBDCs, central banks must consider key issues like privacy, design, cross-border payments, and ensuring anonymity while maintaining oversight of the financial system and ability to implement monetary policy. For India, influencing factors include controlling criminal activities, substituting private cryptocurrencies, and reducing black money.

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129 views8 pages

Central Bank Digital Currency

Central bank digital currencies (CBDCs) are digital forms of sovereign currency issued by central banks. There are two main types - wholesale CBDCs for use between banks and retail CBDCs for use by consumers and businesses. As more countries explore CBDCs, central banks must consider key issues like privacy, design, cross-border payments, and ensuring anonymity while maintaining oversight of the financial system and ability to implement monetary policy. For India, influencing factors include controlling criminal activities, substituting private cryptocurrencies, and reducing black money.

Uploaded by

afsal manzil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CBDC

Central bank digital Currency


List
• What Is a Central Bank Digital Currency (CBDC)?
• Understanding Central Bank Digital Currencies (CBDCs)
• Goals of Central Bank Digital Currencies
• Types of CBDCs
• Issues CBDCs Address and Create
• Influencing factor in india
• Factor to be considered
• In india
What Is a Central Bank Digital Currency (CBDC)?

• Central bank digital currencies are digital tokens, similar to cryptocurrency, issued
by a central bank. They are pegged to the value of that country's fiat currency.
• Many countries are developing CBDCs, and some have even implemented them.
Because so many countries are researching ways to transition to digital currencies,

3
Understanding Central Bank Digital Currencies (CBDCs)

• Fiat money is a government-issued currency that is not backed by a physical


commodity like gold or silver. It is considered a form of legal tender that can be
used to exchange goods and services

• The introduction and evolution of cryptocurrency and blockchain technology


have created further interest in cashless societies and digital currencies. Thus,
governments and central banks worldwide are exploring the possibility of
using government-backed digital currencies
Types of CBDCs

There are two types of CBDCs,

wholesale and retail.

1) Wholesale CBDCs are primarily used by financial institutions.


2) Retail CBDCs are used by consumers and businesses, much like physical forms of currency.4

Wholesale CBDCs
Retail CBDCs
Wholesale CBDCs are similar to holding
Retail CBDCs are government-
reserves in a central bank. The central bank
backed digital currencies used by
grants an institution an account to deposit
consumers and businesses. Retail
funds or use to settle interbank transfers.
CBDCs eliminate intermediary risk—
Central banks can then use monetary policy
the risk that private digital currency
tools such as reserve requirements or
issuers might become bankrupt and
interest on reserve balances to influence
lose customers' assets
lending and set interest rates.
5
Issues CBDCs Address and Create

Issues Addressed By CBDCs Issues That Need Addressing


•Free from credit and liquidity risk •Financial structure changes
•Cross-border payment improvements •Financial system stability
•Supports the international role of the dollar •Monetary policy influence
•Financial inclusion •Privacy and protection
•Expands access to the general public •Cybersecurity

6
Factors to be considered before implementing it to the
market

• Privacy of data
• Design
• Ensure Anonymity in the transaction
• Cross border payment
• Protection laws

7
Influencing factor in india

• To control the criminal • It will be substitute


activities done by use of for other private
private currencies. crypto currencies

Creation of black money Main problem

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