Paper: GS – III, Subject: Economy, Topic: Broad/Overlap, Issue: Strengthening e-Rupee.
Context:
India’s Central Bank Digital Currency (CBDC), the e-Rupee, has been introduced by RBI. The challenge lies in its adoption and wider retail use compared to UPI. Hence the proposal to use GST collection through e-Rupee can act as a major push.
Key Highlights:
Need for e-Rupee despite UPI:
- UPI dominance: 700+ million daily transactions.
| Limitations of UPI | CBDC advantages |
| Requires linked bank accounts and internet access.Migrant workers, remote areas with limited bank branches/ATMs face exclusion. | Direct transfers without intermediaries.Secure welfare payments.Offline potential (via stored value on devices). |
Advantages of e-Rupee Adoption:
Challenges:
- Privacy concerns: Traceability could infringe on user privacy.
- Digital literacy & access: Ensuring adoption in rural and low-income areas is a challenge.
- Technology integration: Requires compatibility with payment systems, banks, and international settlements.
Way Forward:
- Start with GST payments to establish scale and credibility.
- Expand into welfare transfers, remittances, and cross-border trade.
- Balance traceability with privacy.
- Integrate with global digital currency frameworks.
Conclusion:
The e-Rupee is the future of money in India. GST adoption can be the turning point for mainstream use. With proper safeguards, it can enhance financial inclusion, efficiency, transparency, and global competitiveness.
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