I don’t see the need for a retail CBDC in India right now. India already has a TCS (tax collected at source) for outward remittances beyond Rs 700,000 in a financial year. This is a tax that’s collected first and refunded or adjusted later. The tracking of these transactions across all authorized forex dealers is already done by the Reserve Bank of India (RBI). So a CBDC isn’t going to add value here. But I think it will be made a case since CBDC for retail is a solution searching for a problem.
The CBDC being a zero interest instrument, only a scare created about lots of counterfeit paper currency could increase adoption, IMO (just like a fake bogeyman about “black money” was told when declaring more than 80% of the currency as invalid in 2016. [1]
Cash is simple. Cash is easy. Cash doesn’t need smartphones. Did you know that less than half (or half) the population in India has a smartphone? At least one major “too big to fail” bank [2] is distributing an Android app for the CBDC on its website as an APK file. [2]
The CBDC being a zero interest instrument, only a scare created about lots of counterfeit paper currency could increase adoption, IMO (just like a fake bogeyman about “black money” was told when declaring more than 80% of the currency as invalid in 2016. [1]
Cash is simple. Cash is easy. Cash doesn’t need smartphones. Did you know that less than half (or half) the population in India has a smartphone? At least one major “too big to fail” bank [2] is distributing an Android app for the CBDC on its website as an APK file. [2]
[1]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...
[2]: https://www.icicibank.com/personal-banking/online-services/f...