The Reserve Bank of India is Expanding CBDC While Dismissing Privately Issued Stablecoins

The Reserve Bank of India (RBI) is planning to increase the number of Central Bank Digital Currency (CBDC) transactions to one million per day by the end of 2023, according to Deputy Governor T Rabi Sankar. This ambitious target comes as the RBI currently records around 5,000-10,000 transactions daily with its retail CBDC, the e₹-R.

CBDCs are a type of digital or virtual currency that is issued and regulated by a country’s central bank. They represent a digital form of a country’s fiat currency and are backed by the monetary reserves of that country. CBDCs are designed to operate and function like traditional money but in a digital form, which can be used for everyday transactions, cross-border payments, and other financial operations.

The RBI’s strategy to boost CBDC usage includes leveraging the Unified Payments Interface (UPI) network. “There will be one QR code, and you can swipe the QR code using the CBDC app. If the merchant has a CBDC account, the payment will settle in the CBDC wallet. If the merchant does not have a CBDC account, then there will be an option to make payment using UPI,” Sankar explained.

Currently, 1.3 million customers and 0.3 million merchants are using the retail digital Rupee, with 13 banks offering retail CBDC. These banks have partially rolled out interoperability, allowing the QR code to be scanned using the CBDC app. Full interoperability for CBDC customers using UPI for payments is expected by the end of the month. The RBI also plans to onboard the remaining 20-25 banks to offer interoperability to CBDC customers, although this may take more time.

Sankar also highlighted the potential of CBDCs in reducing costs for cross-border transactions, which currently stand at a high 6% for small value transactions according to World Bank estimates.

In contrast to Sankar’s positive attitude toward CBDC, he warned that stablecoins pose an existential threat to policy sovereignty, particularly for countries like India. Stablecoins linked to underlying currencies, while beneficial to certain economies, could lead to the risk of dollarisation and transfer of seigniorage to private issuers, replacing the use of the rupee in the economy.

Stablecoins are a type of cryptocurrency that are designed to maintain a stable value relative to a specific asset or a pool of assets. Stablecoins can be pegged to a currency. They are often used to provide stability in the highly volatile crypto markets. Examples of these include Tether (USDT) and USD Coin (USDC), which are not issued by a central bank or government, but by private companies, thus weakening the authorities’ control over it.

Sankar suggested that a stable solution would be for every country to have its own CBDC, with a mechanism for these CBDCs to interface and transact with each other.

The RBI is also considering the anonymity aspect of CBDCs, a defining feature of the currency. However, Sankar emphasized that any decisions regarding anonymity must be legally backed and consistent with the Prevention of Money Laundering Act (PMLA).


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Coinbase Lists Two New Ethereum-Based Altcoin Projects, Sparking Big Rallies

A pair of altcoins are seeing bullish price action after a surprise listing by top US crypto exchange Coinbase.

In an announcement, Coinbase says that multichain interoperability platform Loom Network (LOOM) is live for buying and selling on its main website as well as iOS and Android apps.

Loom Network aims to give developers of decentralized applications (DApps) tools that are both scalable and designed for ease of use.

The project website says,

“With seamless integrations to Bitcoin, Ethereum, Binance Chain, and all major blockchains, deploying once to Loom lets you future-proof your DApp by reaching the largest number of users possible.”

LOOM, the project’s native token secures the Basechain mainnet and can also be used by developers to pay their DApp hosting fees.

News of the Coinbase announcement initially had Loom Network weaving threads of gold as it soared nearly 28% from $0.077 to $0.107, before correcting in several legs down to $0.081. LOOM remains up by 5% overall.

Also getting the green light from Coinbase Pro is the pet-focused Pawtocol, whose native token UPI stands for Universal Pet Income.

Citing problems in pet care such as poor health, deceptive advertising practices and corporate monopolies, Pawtocol aims to harness the power of blockchain technology to revolutionize the industry.

According to the whitepaper,

“Pawtocol was inspired by a shared vision to build a global community of pet parents, service providers, and manufacturers who are unified towards improving pet care.

We have a mission to help pets around the world live longer and healthier lives by empowering pet caretakers with cutting-edge technology and data.”

Animal lovers can earn UPI by sharing data from their pet’s scannable, blockchain-connected tag and then use the token to purchase toys and food.

News of the Coinbase listing has seen Pawtocol fetching impressive gains, initially rallying from $0.09 to $0.15 for a quick 66% gain before correcting. At time of writing, UPI is trading just under $0.12.

Coinbase says that UPI will be available to trade paired with USD and USDT once appropriate liquidity conditions are met.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/prodigital art/Natalia Siiatovskaia/Fotomay


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