Digital Finance: Global Impact of India's CBDC Project
Introduction
In a groundbreaking move, India's Reserve Bank has embarked on a transformative journey with its Central Bank Digital Currency (CBDC) project. As the world grapples with the evolving landscape of digital finance, the implications of India's CBDC initiative extend beyond its borders, potentially reshaping global payment systems. The Union Minister of State for Finance, Shri Pankaj Chaudhary, revealed that on October 7, 2022, the Reserve Bank of India released a proposal note on Central Bank Digital Currency (CBDC). Two pilot projects using blockchain-based technology are described in the concept note: Digital Rupee-Wholesale (e₹-W) and Digital Rupee-Retail (e₹-R). Launched on November 1, 2022, the bulk trading pilot aims to increase intermediary competitiveness, particularly in the resolution of trades in the secondary market involving sovereign debt. In parallel, on December 1, 2022, the retail banking pilot, known as e₹-R, got underway in a limited user group with eight banks taking part in stages.
The digital asset known as e₳-R is issued across financial institutions for Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions. It is intended to serve as a virtual currency that represents legal money and exhibits characteristics similar to actual cash. Based on input gathered during the continuing trial phases, the RBI intends to progressively broaden the pilot project's scope.
Central Bank Digital Currency Pilot Projects
Central Bank Digital Currency (CBDC), which the Central Bank of India is promoting, may easily perform an essential part in payments made across borders, according to Reserve Bank Governor Shaktikanta Das. The CBDC is going to be expanded to the international financial markets after being implemented as a trial in both the retail and wholesale industries.
CBDC in International Payments
He emphasized that although physical currency will still exist, the CBDC will eventually replace all forms of money worldwide.
"CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC," he stated. He also stated that as worldwide commerce moves more and more around science and technology, CBDCs will play a significant role since they can effectively and affordably speed up payment processing across different countries. Regarding India's foreign exchange reserves, the governor stated that the selection to increase the resources as a safety net and protection versus contagion possibilities was made consciously.
CBDCs' Place in the Transnational Economic Revolution
In certain economies worldwide, having a CBDC internationally accessible could lead to more replacements for foreign currencies rather than the home currencies, which could cause financial aggregates to become volatile and change the mix of instruments of exchange.
CBDC may have benefits related to first-mover savings of scale, and other consequences even in everyday circumstances. If nations with global currencies have established CBDCs, they could strengthen current advantages and disadvantages, including consequences, particularly in terms of revenue. In a similar vein, CBDC might alter the structure of international liquidity while safeguarding asset supply. Additionally, and particularly if imposed abruptly, CBDC may, in certain circumstances, result in significant capital movements and associated repercussions on the foreign exchange rate as well as additional asset prices. Furthermore, nations may encounter difficulties in getting ready for virtual currencies issued by central banks.
The worldwide and international scope of CBDCs accessible to immigrants may become particularly apparent in situations where there is a widespread flight safety concern. In these circumstances, converting a CBDC into a foreign currency would make it possible for capital markets to deleverage more quickly. The elimination of debt challenges could show up as tight finance constraints and abrupt swings in foreign exchange markets if CBDCS expedited its flight from uncertainty.
Deposits of Foreign Exchange and Self-Dependency
Reserve Bank Governor Shaktikanta Das stated "We must rely on ourselves. We must maintain our robust reserves. In order to achieve that goal, we have been amassing quite substantial reserves, and the outside world has come to feel quite confident that India would be able to fulfil its contractual responsibilities to the international community no matter what the obstacles,"
Involvement of RBI in the Currency Market
Given that the trading community was confident that the Reserve Bank of India would be capable of and able to fulfil its contractual responsibilities, the value of the Indian rupee did not decline as dramatically. The RBI governor stated that the RBI does participate in the economy, but that "our engagement operates in two ways," he would not hesitate to acknowledge this.
The Value of Macroeconomic and Budgetary Cooperation
According to RBI Governor Das, the RBI makes purchases and sales of dollars based on the direction in which the financial sector is trending. However, the RBI does not intend to set a certain level for the rupee because it does not consider any specific threshold for the Indian rupee's conversion rate against the US dollar. He also emphasized how crucial it is for both the financial and monetary authorities to work together.
Conclusion
India's CBDC project signals a transformative shift in the global digital finance landscape. Governor Shaktikanta Das envisions CBDCs as the future global currency, emphasizing their role in international payments. The potential impact on financial systems, cross-border transactions, and the need for self-reliance underscore the significance of India's CBDC initiative in shaping the evolving dynamics of the digital economy. As the project progresses, close cooperation between financial and monetary authorities becomes imperative for navigating the challenges and opportunities associated with this groundbreaking venture.
References
- https://economictimes.indiatimes.com/news/economy/policy/central-bank-digital-currency-can-play-important-role-in-cross-border-payment-rbi-guv/articleshow/104706717.cms
- https://www.bis.org/cpmi/publ/d174.pdf
- https://bfsi.economictimes.indiatimes.com/news/fintech/explained-how-rbi-is-leveraging-upi-to-push-the-use-of-retail-cbdc/103591989
- https://www.imf.org/en/News/Articles/2022/02/09/sp020922-the-future-of-money-gearing-up-for-central-bank-digital-currency
- https://www.business-standard.com/economy/news/cbdc-pilot-projects-show-promising-results-rbi-governor-shaktikanta-das-123102601171_1.html
Related Blogs
Introduction
A bill requiring social media companies, providers of encrypted communications, and other online services to report drug activity on their platforms to the U.S. The Drug Enforcement Administration (DEA) advanced to the Senate floor, alarming privacy advocates who claim the legislation transforms businesses into de facto drug enforcement agents and exposes many of them to liability for providing end-to-end encryption.
Why is there a requirement for online companies to report drug activity?
The reason behind the bill is that there was a Kansas teenager died after unknowingly taking a fentanyl-laced pill he purchased on Snapchat. The bill requires social media companies and other web communication providers to provide the DEA with users’ names and other information when the companies have “actual knowledge” that illicit drugs are being distributed on their platforms.
There is an urgent need to look into this matter as platforms like Snapchat and Instagram are the constant applications that netizens use. If these kinds of apps promote the selling of drugs, then it will result in major drug-selling vehicles and become drug-selling platforms.
Threat to end to end encryption
End-to-end encryption has long been criticised by law enforcement for creating a “lawless space” that criminals, terrorists, and other bad actors can exploit for their illicit purposes. End- to end encryption is important for privacy, but it has been criticised as criminals also use it for bad purposes that result in cyber fraud and cybercrimes.
Cases of drug peddling on social media platforms
It is very easy to get drugs on social media, just like calling an Uber. It is that simple to get the drugs. The survey discovered that access to illegal drugs is “staggering” on social media applications, which has contributed to the rising number of fentanyl overdoses, which has resulted in suicide, gun violence, and accidents.
According to another survey, drug dealers use slang, emoticons, QR codes, and disappearing messages to reach customers while avoiding content monitoring measures on social networking platforms. Drug dealers are frequently active on numerous social media platforms, advertising their products on Instagram while providing their WhatApps or Snapchat names for queries, making it difficult for law officials to crack down on the transactions.
There is a need for social media platforms to report these kinds of drug-selling activity on specific platforms to the Drug enforcement administration. The bill requires online companies to report drug cases going on websites, such as the above-mentioned Snapchat case. There are so many other cases where drug dealers sell the drug through Instagram, Snapchat etc. Usually, if Instagram blocks one account, they create another account for the drug selling. Just by only blocking the account does not help to stop drug trafficking on social media platforms.
Will this put the privacy of users at risk?
It is important to report the cybercrime activities of selling drugs on social media platforms. The companies will only detect the activity regarding the drugs which are being sold through social media platforms which are able to detect bad actors and cyber criminals. The detection will be on the particular activities on the applications where it is happening because the social media platforms lack regulations to govern them, and their convenience becomes the major vehicle for the drugs sale.
Conclusion
Social media companies are required to report these kinds of activities happening on their platforms immediately to the Drugs enforcement Administration so that the DEA will take the required steps instead of just blocking the account. Because just blocking does not stop these drug markets from happening online. There must be proper reporting for that. And there is a need for social media regulations. Social media platforms mostly influence people.
Executive Summary:
A manipulated image showing someone making an offensive gesture towards Prime Minister Narendra Modi is circulating on social media. However, the original photo does not display any such behavior towards the Prime Minister. The CyberPeace Research Team conducted an analysis and found that the genuine image was published in a Hindustan Times article in May 2019, where no rude gesture was visible. A comparison of the viral and authentic images clearly shows the manipulation. Moreover, The Hitavada also published the same image in 2019. Further investigation revealed that ABPLive also had the image.
Claims:
A picture showing an individual making a derogatory gesture towards Prime Minister Narendra Modi is being widely shared across social media platforms.
Fact Check:
Upon receiving the news, we immediately ran a reverse search of the image and found an article by Hindustan Times, where a similar photo was posted but there was no sign of such obscene gestures shown towards PM Modi.
ABP Live and The Hitavada also have the same image published on their website in May 2019.
Comparing both the viral photo and the photo found on official news websites, we found that almost everything resembles each other except the derogatory sign claimed in the viral image.
With this, we have found that someone took the original image, published in May 2019, and edited it with a disrespectful hand gesture, and which has recently gone viral across social media and has no connection with reality.
Conclusion:
In conclusion, a manipulated picture circulating online showing someone making a rude gesture towards Prime Minister Narendra Modi has been debunked by the Cyberpeace Research team. The viral image is just an edited version of the original image published in 2019. This demonstrates the need for all social media users to check/ verify the information and facts before sharing, to prevent the spread of fake content. Hence the viral image is fake and Misleading.
- Claim: A picture shows someone making a rude gesture towards Prime Minister Narendra Modi
- Claimed on: X, Instagram
- Fact Check: Fake & Misleading
Executive Summary
A viral video allegedly featuring cricketer Virat Kohli endorsing a betting app named ‘Aviator’ is being shared widely across the social platform. CyberPeace Research Team’s Investigations revealed that the same has been made using the deepfake technology. In the viral video, we found some potential anomalies that can be said to have been created using Synthetic Media, also no genuine celebrity endorsements for the app exist, we have also previously debunked such Deep Fake videos of cricketer Virat Kohli regarding the misuse of deep fake technology. The spread of such content underscores the need for social media platforms to implement robust measures to combat online scams and misinformation.
Claims:
The claim made is that a video circulating on social media depicts Indian cricketer Virat Kohli endorsing a betting app called "Aviator." The video features an Indian News channel named India TV, where the journalist reportedly endorses the betting app followed by Virat Kohli's experience with the betting app.
Fact Check:
Upon receiving the news, we thoroughly watched the video and found some featured anomalies that are usually found in regular deep fake videos such as the lip sync of the journalist is not proper, and if we see it carefully the lips do not match with the audio that we can hear in the Video. It’s the same case when Virat Kohli Speaks in the video.
We then divided the video into keyframes and reverse searched one of the frames from the Kohli’s part, we found a video similar to the one spread, where we could see Virat Kohli wearing the same brown jacket in that video, uploaded on his verified Instagram handle which is an ad promotion in collaboration with American Tourister.
After going through the entire video, it is evident that Virat Kohli is not endorsing any betting app, rather he is talking about an ad promotion collaborating with American Tourister.
We then did some keyword searches to see if India TV had published any news as claimed in the Viral Video, but we didn’t find any credible source.
Therefore, upon noticing the major anomalies in the video and doing further analysis found that the video was created using Synthetic Media, it's a fake and misleading one.
Conclusion:
The video of Virat Kohli promoting a betting app is fake and does not actually feature the celebrity endorsing the app. This brings up many concerns regarding how Artificial Intelligence is being used for fraudulent activities. Social media platforms need to take action against the spread of fake videos like these.
Claim: Video surfacing on social media shows Indian cricket star Virat Kohli promoting a betting application known as "Aviator."
Claimed on: Facebook
Fact Check: Fake & Misleading
