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CBDC is the same as currency issued by a central bank but takes a different form than paper (or polymer). It is a sovereign currency in an electronic form and will appear as a liability (currency in circulation) on a central bank's balance sheet.
Ajay Kumar Choudhary, Executive Director (ED) at Reserve Bank of India (RBI) on Friday said that they are looking at an offline functionality of central bank digital currency (CBDC). He said that CBDC will soon become the medium of exchange and it needs all features of physical currency, including anonymity. In a conversation with CNBC-TV18, Choudhary added that CBDC will provide public with digital form of money and will act as an alternative to cryptos.
"CBDCs are exchangeable with currency and have all the features of currency. They have all features of physical cash like trust, safety etc. It is aimed to complement, rather than replacing physical currency," Choudhary told CNBC-TV18.
On its usage, he said that they intend to scale up customers part of retail CBDC pilot to a million customers. So far, pilot has generated about 800K transactions and multiple use cases of CBDC have come up during COVID-19.