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A cryptocurrency is a digital or virtual token that uses strong cryptography to secure transactions. It is a decentralized digital asset that is stored on a distributed ledger, which is managed by consensus algorithms like proof of stake and proof of work.


Crypto has mainly two use cases:

Mode of payment

  • Crypto can be used as a mode of payment and facilitates
  • Peer to peer transactions
  • Inter bank transactions
  • Cross border and domestic remittances

Digital assets

  • Utility coins
  • Asset backed
  • Security backed
  • Currency backed

Central Bank Digital Currency (CBDC) is the next phase of evolution of money, transcending into a digital only form with significant advantages over fiat currency. The Reserve Bank of India will launch the CBDC for India - ‘Digital Rupee’ in FY 2022-23. Many other countries are also exploring the implementation of CBDC.

Digital Rupee will be the digital form of the currency issued by the RBI and will be in lieu of the paper/metal currency issued. It is the same as currency and is exchangeable one-to-one with the currency. Only its form is different.

Categories of CBDC

  • Used for trades between the central bank and public/private banks
  • It will allow interbank settlements in real time
  • Helps in the reduction of risks related to liquidity and counterparty credit
  • Examples: SAR (Hong Kong), Inthanon (Thailand), Dunbar (Singapore), JASPER (Canada)

  • Direct Central Bank issues directly to the general public
  • Indirect Claim is on the intermediary commercial bank but backed by the Central bank
  • Hybrid Central bank issues to PSPs, which onboard clients and execute the payments
  • Examples: Sand Dollar (Bahamas), DC/EP (China), eNaira (Tanzania), e krona (Sweden), SOV (Marshall Islands)

Potential CBDC Uses in India

Subsidy disbursements and pre-programmed money

Subsidy disbursements and pre-programmed money 
‘Fit for purpose ’ money used for social benefits, subsidies and other targeted payments in a country


CBDCs can be used for faster remittances i.e. cross border and domestic

Retail Payments

Retail payments
CBDCs can be used for retail payments with payment instruments made available for payment transactions to be made via CBDC

MSME lending

MSME lending
Instant lending to MSMEs in India can be possible with the help of CBDC

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Vivek Belgavi

Vivek Belgavi

Partner, India FinTech Leader, PwC India

Mihir Gandhi

Mihir Gandhi

Partner and Leader
Payments Transformation, PwC India

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