With the introduction of the digital currency known as CBDC in the Budget 2022, many industry knowers and research experts are contemplating about what would be the impact of the digital rupee on the fintech sector. PM Narendra Modi stated that the introduction of CBDC will transform the fintech sector by minimizing the cash printing and logistics management issues, propelling new opportunities, and securing and simplifying digital payments and online transfers of funds. CBDC issuance will also lead to more effective and systematic currency management.
Many fintech experts have emphasized the need for digital currency so that the modern Indian financial system gets its corresponding electronic version. The increased use of crypto currencies and an apparent pique in people’s interests in investing in crypto currencies have bolstered the government to create its digital currency. The CBDC commencement will channel cost-effective globalization of payment set-ups.
Lauding the government’s move, Nishant Arora, Co-Founder, Sixth Element Finserv’s Setup Services India, said, “The Indian government’s decision to introduce CBDC is a welcoming move as it will revolutionize the fintech sector and allay the security and trust issues of Indians related to digital payment transactions.” He added, “This will help Fintech companies increase their trusted user base willing to transact more and engage more.”
Commenting on how CDBC will transform the fintech sector, Pramod Chandrayan, Co-Founder & CPO, FinMapp stated, “Enforcement of CDBC will increase taxpayers, simultaneously resulting in the growth of creditworthy user profiles. It will ultimately boost the lending side of the business for the fintech industry. Enhanced security will encourage more and more people to do transactions on digital platforms and lead to increased transparency, eventually strengthening the vision of financial inclusion for the fintech world and the larger good of the consumers.”
The coming up of CBDC will also boost and expand the horizons of international commerce, pillaring the idea of financial inclusivity and potentially giving rise to new forms of e-commerce and revolutionizing the shopping and investment trends across India. Digital currency payments would reduce the settlement risks in the financial sector. It would also promulgate forex transactions on a real-time basis.