Need to ensure safety of CBDCs before introduction: RBI Governor

The main concern comes from the angle of cyber security and possibility of digital frauds, which merits more care before it is introduced, said RBI governor Shaktikanta Das

Reserve Bank of India (RBI) is in advanced stage of introducing its version of central bank digital currency (CBDC), but is proceeding with caution to make sure security risks are addressed first. 

The main concern comes from the angle of cyber security and the possibility of digital frauds, which merits more care before it is introduced, RBI governor Shaktikanta Das said on Wednesday in a post-policy press conference. 

"Just as a few years ago the major concern was fake Indian currency notes, similar things can also happen when we are launching CBDC,” said the RBI governor. 

“In the CBDC universe, we will have to be tactful and be careful with regard to ensuring cyber security and taking preemptive steps to prevent any kind of frauds. There will be attempts. So, we have to have a robust system to have firewalls against such things happening," Das said. 

Deputy Governor T Rabi Sankar said the central bank is working on two types of CBDC – one based on wholesale account, and the other based on retail.  

This will be an electronic version of the paper currency, and there are risks of digital frauds, which needs to be addressed first, said Rabi Sankar. 

"A lot of work has been done on the wholesale account based CBDC but the retail account based CBDC is complicated and will take some more time," Rabi Sankar said.  

Earlier, senior officials had said the CBDC may come in a limited manner by December. In the annual economic conclave of State Bank of India, P Vasudevan, chief general manager at the Dept. of Payment & Settlement of the RBI had said the central bank was looking at launching CBDC in the first quarter of the next fiscal on a pilot basis.