Digital Sikke(Rupee) ......... Ke do(2) Pehlu(sides)

Arjuna (Fictional Character): Krishna, Previously we had discussed what is the digital rupee and how it is going to work, but how do you think the government and RBI will bring this dream of the Digital Rupee to reality?

Krishna (Fictional Character): Arjuna, the motive of the government behind the implementation of the digital rupee is to reduce the cash transaction in the system. This is a big task for the government which is not going to be easy and it will be a long process. Just like every coin has 2 sides and every idea has its pros and cons, the implementation of the digital rupee also has its benefits as well as challenges. 

Arjuna (Fictional Character): Krishna, what are the Benefits of using the Digital Rupee?

Krishna (Fictional Character): Arjuna, the following are the benefits of using the digital rupee:

1. RBI Survey showed that there will be an increase in online transactions, which will help increase transparency in those sectors where cash payment volume is higher.
2. It will reduce the need for card networks, and payment gateways and there will be a reduction in the risk of default since the entire control is in the hand of RBI.
3. Unlike Cryptocurrency, the digital rupee is governed by the central authority. Thus, it has a low risk of being volatile and provides security to its user.
4. Digital Rupee may allow for much faster transactions than those performed through traditional financial institutions.
5. It may allow people in remote areas to make transactions easily and hassle-free without the use of the internet.

Arjuna (Fictional Character): Krishna, What Challenges are there that have been allied with its benefits?

Krishna (Fictional Character): Arjuna, the Following are the challenges which RBI need to overcome while introducing the digital Rupee:

1. Transfer of payment without internet: Currently payments through UPI are being done with the help of the internet but There can be issues with the non-availability of the internet for making payments in rural areas.
2. Since RBI will be having a complete log of the entire chain of transactions which was not possible in cash transactions, this might not gain popularity for people to adopt.
3. No incentive to switch to digital rupee for users: There is no real incentive to switch to a CBDC as a growing proportion of retail transactions are done already by using UPI-based fast payment systems.
4. Potential cybersecurity threat:  Every new invention in technology always invites cybersecurity threats.

Arjuna (Fictional Character): Krishna, what one should learn from this?

Krishna (Fictional Character): Arjuna, by bringing Digital Rupee into the market government is trying to minimize the cash transactions and bring transparency to the market. In this budget, the government might consider bringing the compulsion of the use of the Digital Rupee in certain sectors i.e., payments in certain transactions will be made by the mode of Digital Rupee only. Adopting new technology and innovation is a step in the right direction but one should always look out towards the possible threats and risks that come with it.