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India should take caution in introducing CBDC, says NCAER report

The report says that while a CBDC would have more penetration, the reach of Unified Payments Interface is widespread.

Topics
digital currency | Unified Payments Interface | UPI

BS Reporter 

Imaging: Ajay Mohanty
Imaging: Ajay Mohanty

India should take a cautious approach towards launching a central bank (CBDC) as it could be hazardous to institutions, retail-end users, and to the reputation of the central bank, says a paper by the National Council of Applied Economic Research (NCAER). Written by director general Poonam Gupta, it says that while a CBDC would have more penetration, the reach of is widespread. “We argue that many of these arguments for CBDCs have been advanced uncritically. Their proponents fail to acknowledge that some of these goals can be advanced at lower cost and at less risk through alternative means,” the report stated.

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First Published: Wed, May 04 2022. 02:06 IST
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