Cyber security, frauds main concerns with digital currency: RBI

As the RBI moves ahead for the launch of the central bank digital currency (CBDC), Governor Shaktikanta Das on Wednesday marked out cyber security and digital frauds as the main challenges in the new system.

Deputy Governor T Rabi Sankar said there are two types of CBDCs – wholesale and retail – and a lot of work has happened in the former while the latter was termed as a “complicated” aspect which will take time.

The RBI had earlier this year announced that it has started work on the CBDC, in line with other major central banks of the world which are looking at a fiat digital currency. According to a report, the RBI is looking to start with pilot exercises on the same front by early next year.

“Main concern comes from the angle of cybersecurity and possibility of digital frauds. We have to be very careful about that,” Das told reporters in the post-policy interaction.

Das recalled that a few years ago, there were concerns with fake currency and similar aspects can play out with the launch of the CBDC, which need to be prevented by putting up the necessary firewalls and a robust security architecture.

Sankar explained that the CBDC will be an electronic version of the current paper-based currency and also underlined the risks around digital frauds and cyber risks as “major challenges”.

“There has been a lot of work which has happened in the wholesale account-based, while retail is complicated and will take time. As and when whichever is ready first, we will release it for a pilot,” he added.

Earlier, Das had hinted about a soft launch for the CBDC by the end of December 2021.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor