Digital Rupee: No need to create “fear psychosis” over privacy concerns, says RBI governor

Mumbai:

Asserting that the newly introduced central bank digital currency does not leave any mark with the bank, RBI Governor Shaktikanta Das today said there is no need to create a “fear psychosis” in the minds of people over privacy concerns.

The pilot on wholesale central bank digital currency (CBDC) has been very satisfactory, and the RBI is keen to learn from and implement the ongoing pilot for retail CBDCs, Shaktikanta Das told reporters at the post-policy press meet here.

Answering a question on possible raids by agencies like the Enforcement Directorate in future, as CBDCs do not have anonymity like fiat currency, Shaktikanta Das said that one should not be concerned about privacy concerns. Currency note to some other person… Here also incidentally, I must say, you cannot trace because the information is not available with the bank. The bank doesn’t know,” said Shaktikanta Das.

“It (CBDC) goes from my mobile to someone else’s mobile. So why should we create this fear psychosis?” He asked.

“The Income Tax Department has certain limits for cash payments… (for) withdrawals beyond a certain limit, you have to give your PAN card number. Same rules will apply in case of CBDCs as both are currencies, ” They said. noted.

Several experts, including former RBI governor D Subbarao, have expressed concern over the privacy aspect of CBDCs. Deputy Governor T Rabi Shankar on Wednesday acknowledged concerns over privacy, but hastened to add that the central bank is looking at solutions to make CBDCs on par with paper currency when it comes to anonymity being the key feature that has ensured That cash is still used in the developed world.

T Rabi Shankar said, “How to ensure anonymity in the case of digital currency, since the general understanding is that digital leaves a footprint, there can be various solutions.” He added that the RBI is looking at a technical solution as well as a legal solution to help address concerns over the issue. T Rabi Shankar further said that the authorities will build on Aadhaar by introducing the currency, and then rely on the private sector to innovate and launch various use cases for the same.

Both Shaktikanta Das and T Rabi Shankar explained that a CBDC is different from the Unified Payments Interface (UPI), which operates through a link to an individual’s bank account.

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