RBI Governor: Cyber Frauds a Concern for CBDCs

On Wednesday, RBI governor Shaktikanta Das said that cyber frauds risks are among the main challenges facing central bank digital currency rollout. He trusts that the marketplace requires systems that thwart these illegal attempts.

Reserve Bank of India governor advises financial systems to be cautious when navigating digital assets. He stated that the digital frauds possibility and cyber security remain a threat to the crypto space. Das revealed that India was concerned about fake currency notes some years ago. The official believes launching CBDCs might encounter a similar fate.

RBI governor stated that CBDC universe required individuals to ensure cyber safety and apply preemptive procedures to avoid fraudulent cases. He believes a robust system is necessary to carb such cases.

A CBDC (central bank digital currency) is an electronic liability sovereign currency that would showcase (circulating currency) on a bank’s balance sheet. Meanwhile, this year’s Bank of International Settlements (BIS) survey discovered that 86% of banks researched about CBDCs and their potential. 60% experimented with the technology, while 14% deployed pilot projects.

BIS Yearly Economic Report 2021 states that financial intermediaries or the global economy can use CBDCs. T Rabi Sankar, Reserve Bank of India deputy governor, announced the central bank has been exploring CBDCs and their potential. That was on Wednesday. He revealed that the retail component could take time.

Furthermore, the deputy governor said that India is working on two CBDCs types – retail and wholesale based. The wholesale based has seen significant progress. Meanwhile, the retail CBDC will take more time as it is somewhat complicated.

In July, Sankar stated that the central bank targeted a phased CBDCs implementation strategy and evaluated use cases to avoid disruptions. RBI examined whether CBDCs will serve for retail payments or include wholesale transactions. Moreover, should the asset be a centralized or distributed ledger, anonymity, and whether RBI will conduct direct issuance or via banks?

PTI’s November 29 reports revealed Finance minister, Nirmala Sitharaman, stating that the government has no plans to recognize BTC as an official currency. Though the updates on India’s crypto markets remain unclear, sources suggest authorities would consider regulation over the ban.

By PhotographerIncognito – shutterstock.com

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