SYNTHETIC CBDC” is not a “CBDC” CBDC and its Core Features (e₹-Whole Sale and e₹-Retail)

Abstract

For a Nation’s Economy to function successfully, its citizens must have confidence in its money and payment services. The Reserve Bank of India, as the Nation’s Central Bank, works to maintain the public’s confidence by development:

~ Monetary Stability.

~ Financial Stability, and also

~ A Safe and Efficient Payment System.

A CBDC can be defined as a ‘Form of Money’ and it is denominated in Fiat Currency (Central Bank Money), in an Electronic Form (Virtual), and which is a liability on the Central Bank’s Balance Sheet similar to Cash and Central Bank Deposits showing in the Balance Sheet of Reserve Bank of India.

It could be considered as “Smart Cash” with unique characteristics and enabled by a Digital Form.

The Bank for International Settlements (BIS) defines “A CBDC as a purely Digital Bank Note that could be used by Individuals to Pay to the Businesses, Shops or each other (Called a “Retail CBDC”), or between the Financial Institutions to settle their trades in Financial Markets (Called a “Wholesale CBDC”).

Abbreviations:

CBDC=Central Bank Digital Currency.

KYC=Know Your Customer.

AML=Anti-Money Laundering.

CTF=Counter-Terrorist Financing.

PPI=Prepaid Payment Instruments.