Digital Frauds Remain Concern For Central Bank Digital Currency: RBI Governor Shaktikanta Das

Earlier this year, the RBI had revealed that it has started work on the CBDC, in line with other major central banks of the world which are looking at a fiat digital currency

Image: AFP

New Delhi: With the Reserve Bank of India (RBI) looking to launch the central bank digital currency (CBDC) as the Cryptocurrency and Official Digital Currency Bill, 2021is scheduled to be introduced in the ongoing winter session of Parliament, governor Shaktikanta Das spelled out the major challenges including cyber security and digital frauds in the new system.

Of the two types of CBDCs -wholesale and retail, a lot of work has happened in the former while the latter was termed as a "complicated" aspect which will take time, said deputy governor T Rabi Sankar, according to news agency PTI.

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Earlier this year, the RBI had revealed that it has started work on the CBDC, in line with other major central banks of the world which are looking at a fiat digital currency.

According to a report, the RBI is looking to start with pilot exercises on the same front by early next year.

"Main concern comes from the angle of cybersecurity and possibility of digital frauds. We have to be very careful about that," Das said after announcement of the MPC decision.

While recalling the concerns shared a few years ago, Das reiterated that fake currency and similar aspects can play out with the launch of the CBDC, which need to be prevented by putting up the necessary firewalls and a robust security architecture.

Sankar explained that the CBDC will be an electronic version of the current paper-based currency and also underlined the risks around digital frauds and cyber risks as "major challenges".

"There has been a lot of work which has happened in the wholesale account-based, while retail is complicated and will take time. As and when whichever is ready first, we will release it for a pilot," he added.

Earlier, Das had hinted about a soft launch for the CBDC by the end of December 2021.