Cyber frauds main concern for digital currency

The Reserve Bank of India(RBI) is in the midst of working on digital currency but cyber security and digital frauds have emerged as the main concern.

“Main concern comes from the angle of cybersecurity and the possibility of digital frauds. We have to be very careful about that,” RBI Governor Shaktikanta Das told reporters in the post-policy interaction.

Das said that even in the CBDC universe, one has to ensure cyber security and take preemptive steps to prevent any kind of fraud.

There will be attempts of digital frauds, so there is a need to have a robust system in place before introducing a digital currency, Das added.

A central bank digital currency is a sovereign currency in an electronic form and will appear as liability (currency in circulation) on a central bank’s balance sheet.

An estimated 86 per cent of central banks are actively researching the potential for central bank digital currency, 60 per cent are experimenting with the technology and 14 per cent are deploying pilot projects.

Deputy Governor T Rabi Sankar said there are two types of CBDCs - wholesale and retail.

While a lot of work has happened in the former, the latter is a “complicated” aspect that will take time.

The RBI, which has gone a long way to introduce its own digital currency, may start with pilot exercises on this front by early next year.

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