Succeeding India's Retail Digital Currency

Abstract

The study attempts to critically assess the possibilities of success of the Indian retail digital currency (DC). The Central Bank Digital Currency, popularly known as CBDC, issues in any of the two forms—token and account types—and the Reserve Bank of India (RBI) prefers the former route. A token is a currency or any digital and/or physical asset. Theoretically, tokenization can buy, sell, and transfer digital or real-life assets fully or fractionally. Amending the RBI Act and expanding the scope of the definition of 'bank notes', DC incorporates and enjoys equivalent legal tender like physical currency notes and coins. Albeit the Indians, along with cash, the latter is still preferred and enjoying the status of a 'king' even post-demonetization years. The DC in retail likely could be a game changer in the Indian financial market if the RBI could comprehensively address the teething problems associated with DC.