ABCD of CBDC
All about central bank digital currency that you need to know
Before we dive into the technicals of CBDC, I will give you a quick differentiator with our already existing technology, the UPI payments.
Although the technologies appear to overlap, there are a number of key differences between CBDC( Central bank digital currencies ) and UPI ( Unified payments Interface)
🚀 Nature and Issuance:
- CBDCs: Digital fiat currency issued and regulated by the central bank.
- UPI: Real-time payment system for instant transfers in India.
🚀 Authority and Regulation:
- CBDCs: Central bank-issued and regulated.
- UPI: Regulated by NPCI, overseen by RBI.
🚀 Legal Tender and Value:
- CBDCs: Legal tender backed by the central bank.
- UPI: Facilitates transfers in the underlying currency.
🚀 Scope and Use Cases:
- CBDCs: Enables various financial transactions, including cross-border.
- UPI: Primarily for domestic payments within India.
🚀 Technology:
- CBDCs: Utilizes blockchain or other distributed ledger technologies.
- UPI: Operates on existing banking infrastructure.
CBDCs are digital fiat currencies issued and regulated by central banks, serving diverse financial purposes, while UPI is an Indian real-time payment system primarily focused on domestic transactions.
