This paper is published in Volume-7, Issue-3, 2021
Deepansh Bhati
Shaheed Bhagat Singh College, New Delhi, Delhi, India
Pub. Date
04 May, 2021
Paper ID
Cryptocurrency, Blockchain, CBDC, Economy


Deepansh Bhati. Digital rupee – dissecting the viability of CBDC in India, International Journal of Advance Research, Ideas and Innovations in Technology,

Deepansh Bhati (2021). Digital rupee – dissecting the viability of CBDC in India. International Journal of Advance Research, Ideas and Innovations in Technology, 7(3)

Deepansh Bhati. "Digital rupee – dissecting the viability of CBDC in India." International Journal of Advance Research, Ideas and Innovations in Technology 7.3 (2021).


Crypto Currencies are gaining widespread attention all around the globe. Given many of the disadvantages and high risks involved in crypto transactions, new emergent mechanisms of exchange like Central Bank Digital Currency (CBDC) are entering the market domain which seems relatively promising and less risky. Indian economy can be characterized by ever-rising Non Performing Assets (NPA), low money multiplier, tax evasion, poor tax base, the menace of black money, and high currency deposit ratio (CDR); our research finds that CBDC along with effective policy intervention mechanism can act as a panacea towards ebbing out such perplexities which the economy is confronting. Research points out the poor banking habit among the Indian population which is the primary driving force behind the big divorce between theoretical and actual money multiplier in India. Implementation of CBDC has the requisite potential towards developing banking habits in the masses. Akin to two faces of a coin, with charms come concerns and in the same consonance implementation of CBDC also poses some daunting challenges. First and foremost is the concern of data security in the contemporary milieu when the advancement of science and technology is at its zenith and concomitantly cyber crimes have been witnessing a spur. However, CBDC is a form of cryptocurrency which is characterized by the storage of data using blockchain technology. Under the blockchain framework of data storage, pieces of data are stored in a decentralized manner which makes data theft and deletion an arduous task for cybercriminals. The use of mechanisms like ‘Tokenization’ can also contribute towards securing the data of depositors and preventing frauds and scams. Another impediment in the way is the existing digital divide in the economy, however, implementation of CBDC mechanism in a phased and targeted manner can curb out this impediment to a greater extent. The unprecedented economic crisis owing to the pandemic might have devastating implications in the future and in order to rejuvenate and get all cylinders firing for the Indian economy, CBDC implementation is a dire exigency given the implementation is efficient and in a phased and targeted manner.