RBI sees CBDC risks, but less than in stablecoins

The Reserve Bank of India (RBI) sees privacy concerns associated with the use of programmable central bank digital currency (CBDC), particularly for targeted benefits such as subsidies, according to deputy governor T Rabi Sankar.

- Subhana Shaikh

But the digital rupee is still much safer than stablecoins, he said.CBDCs combine the advantages of tokenized digital money, programming capability, atomic settlement, lower crossborder frictions, while still retaining the essential attributes of sovereign currency that has fiat backing, trust and singleness, Sankar said at a fireside chat during the 18th edition of Mint's Annual BFSI Conclave.

Still, cash-like anonymity is "unavoidable" if the digital rupee is to achieve widespread adoption, Sankar said at a fireside chat during the conclave. However, achieving such anonymity in a digital framework remains challenging, he said

" ... digital transactions always leave a footprint. It is difficult to anonymize transactions. It is possible. There are technologies which make that possible. But more importantly, we would require a legal backing," Sankar said.