HDFC Signs Up 100,000 Customers On The CBDC Platform, Is CBDC Useful For You?
Media sources say that HDFC Bank said on July 13, 2023, that more than 100,000 retail users and about 170,000 retailers had joined its central bank digital currency (CBDC) test platform.
The Unified Payments Interface (UPI) has been tied to the CBDC, which is also known as the digital rupee or e. Customers and businesses can now use both CBDC and UPI with just one Quick Response (QR) code.
It means that the QR code can work with both CBDC and UPI, and the user can choose which one to use for the exchange. The Reserve Bank of India (RBI) started the test CBDC program in December 2022. HDFC Bank is one of the banks that is taking part in it.
As of June 30, 2023, the RBI said that there were more than one million users and more than 262,000 vendors on the CBDC sites of the different banks that were taking part.
WHAT IS THE DIFFERENCE BETWEEN CBDC/DIGITAL RUPEE AND CASH AND UPI?
CBDC has the same legal standing as the government’s national currency. The only change is that it is in an electronic form. It is different from UPI because UPI is a way to pay for things, while CBDC is a currency.
MERITS, DEMERITS OF CBDC
Both good and bad things can be said about the CBDC or digital dollar. Listed below are
CBDC’s Good Points
Settlement time is faster, and services are available 24 hours a day, 7 days a week. Information on the website of State Bank of India, one of the banks in the test program, says that transactions are faster, happen instantly, and are available 24×7. Also, there is no waiting time for villages to be cleared.
On the other hand, there are some limits to moving money offline or through other online methods, such as batch runs, clearing processes in NEFT and RTGS, no transactions on weekends or other bank holidays, etc.
Less expensive to do business: It costs less to do business with digital dollar.
In other places, carrying a lot of cash in its actual form takes up a lot of room and is hard to do. Also, there is always a chance that someone will steal cash. Since digital cash is kept in a digital wallet at the bank, it is safe and always accessible.
The fact that cash has been around for a long time and can be used anonymously has made it the most popular way to pay. But it has problems, like notes that are dirty or cut up. When cash notes get dirty from use or get torn off, you have to change them at the bank. If the note is damaged, you might not even get the full value in exchange. Digital dollar, on the other hand, doesn’t have these risks and doesn’t have these problems.
There is no chance of getting a fake bill. There is also a chance of getting a fake bill when you deal with real money. A study from the RBI shows that the number of fake Rs 20 and Rs 500 notes has gone up from the previous year. With CBDC, the money you have in your account is turned into a digital rupee. This would make it much less likely that you would get a fake note.
CBDC has some risks
Cyber security risk: Even though CBDC has some advantages over cash, it also has some possible problems.
In a world driven by technology, cyber security is something that can’t be avoided. As more and more transactions are done online, hacking dangers of all kinds are becoming more likely. So, people who do deals online need to be careful and use strong protection methods.
People who aren’t good with technology: Because CBDC is digital, it’s hard for people who aren’t good with technology, like seniors, to use. They might prefer to stick with the old, tried-and-true paper cash instead.
CBDC could also run into problems if a device was stolen, if there was no Internet, or if there were software problems.
The program is still in its test phase, and the banks that are taking part are only offering it in a few places, mostly big towns like Mumbai, Delhi, Bengaluru, Bhubaneswar, Ahmedabad, Chandigarh, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. RBI, on the other hand, wants to expand the test to more places.
