The risk of cyber frauds is still one of the major challenges to rolling out a central bank digital currency, requiring systems that thwart such criminal attempts, Reserve Bank of India (RBI) governor Shaktikanta Das said on Wednesday. Earlier this year, the central bank announced that it had started work on the CBDC, in line with other major central banks of the world that are looking at a fiat digital currency.
RBI is looking to start with pilot exercises on the same front by early next year.
The RBI is looking to start with pilot exercises on the same front by early next year. “Main concern comes from the angle of cybersecurity and the possibility of digital frauds. We have to be very careful about that,” the governor revealed. He further recalled that a few years ago, there were concerns with fake currency, and similar aspects can play out with the launch of the CBDC, which need to be prevented by putting up the necessary firewalls and robust security architecture.
India has no plans to recognize bitcoin as a currency.
As reported earlier, finance minister Nirmala Sitharaman had told the parliament that there was no proposal to recognize Bitcoin as a currency, PTI reported on 29 November. In a separate reply, the minister of state for finance, Pankaj Chaudhary, said that the government had received a proposal from RBI in October to amend the Reserve Bank of India Act, 1934 and enhance the scope of the definition of ‘bank note’ to include currency in digital form. There is currently no clarity on the fate of cryptocurrencies in India. However, reports suggest that the central government plans to regulate and not ban them.