CBDC India: RBI Governor Compares Digital Fraud to Fake Indian Currency Notes
While global attention is clinging to India’s upcoming Crypto regulations, Reserve Bank of India (RBI) Governor, Shaktikanta Das just highlighted the concerns around the nation’s Central Bank Digital Currency (CBDC). One of the biggest goals behind launching CBDCs is driven by consumer protection in lieu of the centralised nature of government backed digital currency.
However, Das noted that the RBI has its doubts about cyber security and digital fraud issues, referring to the CBDC launch. Das has compared the threat to cyber security and potential digital frauds via CBDC to that of the former problem of fake Indian currency notes. He emphasised the need to be extra cautious, by building a robust CBDC security system along with resilient firewalls.
“The main concern comes from the angle of cyber security and the possibility of digital frauds. So, we have to be very careful about that just as a few years ago we had a major concern was on fake Indian currency notes. Similar things can also happen when you are launching CBDC…In a CBDC universe, we have to be that much more careful with regard to ensuring cyber security and taking preventive steps to prevent any kinds of frauds because there will be attempts. We have to have robust systems and firewalls.”, Das told Business Today.
RBI Expects to Launch CBDC by Q1 2022
Last month, the RBI confirmed that they expect to launch its CBDC pilot, latest by the first quarter of next year. According to comments by the central bank’s senior official at the State Bank of India’s Banking and Economic Conclave, RBI is seeking to have a functioning CBDC pilot by early 2022.
However, the authorities highlighted that they will be thorough in the process, given that RBI’s CBDC could guide India into Web3. Furthermore, since the Chinese CBDC fraud controversy, Central Banks across the world, have become more cautious.
“I think somewhere it was said that at least by the first quarter of next year a pilot could be launched. So we are bullish on that…We are on the job and we are looking into the various issues and nuances related to CBDC. It’s not a simple thing to just say that CBDC can be a habit from tomorrow on”, the chief general manager at the Department of Payment & Settlement of the RBI, P. Vasudevan told the Business Standard newspaper.