Definition
CBDC (Digital Rupee)
The CBDC, or Digital Rupee, is a central bank digital currency issued by the RBI as a sovereign digital form of cash.
A Central Bank Digital Currency (CBDC) is legal tender issued by the RBI in digital form, distinct from money in bank accounts because it is a direct liability of the central bank, like physical cash. India's Digital Rupee is being piloted in both wholesale (for interbank settlement) and retail (for everyday use) versions.
The retail Digital Rupee is held in wallets and can be exchanged like cash, aiming to offer the convenience of digital payments with the safety of central bank money. It complements rather than replaces UPI and is part of the broader modernisation of India's payments and currency systems.
Related terms
- Reserve Bank of India (RBI)The RBI is India's central bank and monetary authority, responsible for issuing currency, setting policy rates, regulating banks and managing the government's debt.
- NPCINPCI is the National Payments Corporation of India, the umbrella organisation that operates retail payment systems including UPI, RuPay and IMPS.
- RBI Retail DirectRBI Retail Direct is a scheme that lets individual investors directly open an account with the RBI to buy and hold government securities without an intermediary.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.