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Central Bank Digital Currency (CBDC): Critical Issues and the Indian Perspective

D Priyadarshini and Sabyasachi Kar ()
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Sabyasachi Kar: Institute of Economic Growth, Delhi

No 444, IEG Working Papers from Institute of Economic Growth

Abstract: A large number of Central Banks around the world are planning to introduce Central Bank Digital Currencies (CBDCs) as a legal tender in their countries. The Reserve Bank of India (RBI) has also revealed similar plans with an Indian CBDC expected in the near future. Any evaluation of such a major change in the nature of money requires a broader understanding of the opportunities and challenges arising from the adoption of CBDCs. In this paper, we discuss these issues at the conceptual level and specifically in the Indian context. We show that the conceptual issues can be characterised in three ways – monetary sovereignty issues, issues from the point of view of national sovereignty, and developmental issues. In the Indian context, we analyse these issues from the perspective of the rapid digitalization taking place in the country.

Keywords: CBDC; Monetary Sovereignty; Disintermediation; Dollarization; Financial Inclusion; Cryptocurrencies (search for similar items in EconPapers)
JEL-codes: E42 E51 E58 G21 G28 O33 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2021-09
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pay
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Published as Institute of Economic Growth, Delhi, September 2021, pages 1-20

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