'Permanent deletion of transactions can anonymise e-rupee like cash'
New Delhi, May 7, 2024
The e-Rupee is a central bank digital currency (CBDC) issued by the Reserve Bank of India
In a significant development, Reserve Bank of India (RBI) Governor Shaktikanta Das has stated that the permanent deletion of transaction details can help make the e-rupee, India's central bank digital currency (CBDC), as anonymous as physical cash.
What did the RBI governor say?
Speaking at the BIS Innovation Summit on Monday, Das acknowledged the concerns around privacy and anonymity that have arisen since the introduction of the e-rupee in late 2022. He noted that the electronic nature of the CBDC leaves a trace of all transactions, unlike cash, which offers complete anonymity.
To address these concerns, Das suggested that "Anonymity can be addressed through legislation and/or through technology. For example, through permanent deletion of transactions."
"The basic principle is that CBDC can have the same degree of anonymity as cash, no more and no less," he added.
The RBI governor's comments come as the central bank continues to work on enhancing the e-rupee's features to promote financial inclusion. Das highlighted India's plans to introduce offline mode transferability and programmability for the CBDC, which would enable transactions in areas with poor or limited internet connectivity.
India has made CBDC non-remunerative, by making it non-interest bearing to mitigate any potential risks of bank disintermediation, Das said.
What is e-rupee?
The e-Rupee is a central bank digital currency (CBDC) issued by the Reserve Bank of India (RBI). It is a digital version of the Indian Rupee that operates using blockchain or distributed ledger technology.
Key points about the e-Rupee:
It is a legal tender and can be used as a medium of payment and a store of value, similar to physical cash.
The conversion rate is 1 e-Rupee = 1 Indian Rupee.
The e-Rupee can be used for digital transactions in a similar way to cash.
It is different from cryptocurrencies like Bitcoin as it is centrally issued and regulated by the RBI, providing the stability of the Indian Rupee.
How does e-rupee Work?
The central bank e-rupee operates as a form of digital currency issued and controlled by the Reserve Bank of India (RBI), using blockchain or distributed ledger technology for secure and transparent transactions.
[The Business Standard]
