All Wallet-to-wallet transactions to remain anonymous while using CBDC

5 Dec 2022 , 09:56 AM

All wallet-to-wallet transactions of the central bank digital currency (CBDC) in the retail segment are anonymous because those transactions are not reflected in the main banking system of banks. This feature would increase customer confidence in using the digital rupee in India.

The Reserve Bank of India (RBI) launched a pilot project on December 1 to test digital currency, and four banks are taking part across Mumbai, New Delhi, Bengaluru, and Bhubaneswar.

Around 2,000 transactions were made during the pilot’s first three days, and bankers expect volumes to increase this week. For the pilot, which is anticipated to grow, the RBI has created digital rupees worth Rs1.71 crore. Four additional banks and their clients are expected to join the pilot within the next two to three weeks.

In the next few days, 50,000 retailers and customers are to be included. News reports claim that, similar to when a person withdraws money from the bank, the transfer of digital cash from a bank to a CBDC wallet is recorded in the CBS.

In the future, when transactions are made from one CBDC wallet to another, this leg of the transaction is not recorded in the bank’s core banking solution (CBS) and remains anonymous, just like when a customer uses actual cash to make purchases at a store or another merchant establishment.

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