Why in News?
The Reserve Bank of India (RBI) has recommended the government to include a proposal on linking Central Bank Digital Currencies (CBDCs) of BRICS nations in the 2026 BRICS Summit agenda to enhance cross-border payments
- RBI suggested integration of CBDCs among BRICS countries.
- Aim: Enable faster, cheaper, and more efficient cross-border payments.
- Could reduce dependence on the US dollar in global trade.
CBDC:
Central Bank Digital Currency (CBDC) is the digital form of a country’s fiat currency, issued and regulated by its central bank. It serves as a legal tender, equivalent to physical cash, and is a direct liability of the central bank rather than a commercial bank
- In India, CBDC is known as the e-Rupee (e₹).
- It is a legal tender and a direct liability of RBI, unlike cryptocurrencies.
Types of CBDC in India:
- Retail CBDC (e₹-R):
- Used by general public (individuals & businesses)
- For daily transactions
- Stored in digital wallets via banks
- Wholesale CBDC (e₹-W):
- Used by financial institutions
- For interbank settlements
- Useful in government securities market
