Indian PM says digital rupee will facilitate creation of global digital payment scheme Indian prime minister Narendra Modi has offered some more details about the nation’s newly revealed plan to introduce a central bank digital currency (CBDC) in the next year. In a speech delivered to members of the Bharatiya Janata Party he leads, Modi explained that the proposed payment system will be the digital form of …
You haven't been to India lately have you ? India has the Unified Payments Interface (UPI) real-time payments system that currently does 40 billion transactions a year totaling over $1 trillion. The transaction volume of UPI has our doubled for each of the past 5 years, and by end of year will hit $2 trillion.
There are over 750 million smartphones in use out of 1.3 billion total phones. Even pushcart vendors have QR codes for real time payments. You can reasonably get around town and travel around country without ever touching cash.
India already has a functional national ID tied to ones mobile, bank and other data. Almost 450 million bank accounts were opened since 2014, connected to this infrastructure. It's called JAM (Jan Dhan - Aadhaar - Mobile), after the banking, ID and smartphone based mechanism.
The same system also records your Covid vaccination status (CoWin) . One doesn't use paper - the app or the CoWin whatsapp number gets you the copy of your certificate. 1.7 billion Covid vaccinations done so far.
Then what is the point ?
The digital form of my EUR currency is my credit card, and it is converted into cash every time I go visit an ATM.
Why this dogged determination to invent a new digital version of money you already have ?
There has to be a sane reason somewhere. Maybe not a good one, but a sane one.
Because this is insane.
You don't need to invent an entirely new money scheme if the only goal is allow micropayments or money transfers. Just make your credit card and your banking portals handle that with the money you've already got.
Fully agree.
Sane reason, No
less than sane reason, Yes, China is looking at doing digi-coins so India must also.
You're in danger of attributing competence, insight and knowledge to politicos! ;)
ATM ? India does $1 trillion in real time electronic payments across 42 billion transactions, by far the largest in the world, having overtaken China in 2018-19. It will cross $2 trillion by end 2022, having at least doubled in each of the past 5 years.
https://cdn.statcdn.com/Infographic/images/normal/25871.jpeg
You can use real time payments on online stores, big retail outlets, small stores and even pushcart vendors have their QR code pasted on the cart.
According to the Statista chart you have linked, India does $25.5 billion in real time payments. Which is extremely underwhelming.
How about posting the correct source for the 1 trillion figure?
ByTW, in 2019, Alipay alone did $17T in RTPs in China.
Except that Statista has the metric wrong. That's 25 billion transactions in 2020 for a total of $490 billion . Statista gets its data from here:
https://investor.aciworldwide.com/news-releases/news-release-details/global-real-time-payments-transactions-surge-41-percent-2020
"India retains the top spot with 25.5bn real-time payments transactions, followed by China with 15.7bn transactions; South Korea is in 3rd place with 6.0bn, Thailand 4th with 5.2bn and UK is in 5th place with 2.8bn"
$25 billion a year would be quite underwhelming indeed... because India does that much every week, and currently does around Rs.832000 crore ($115 billion) a month across 4.6 billion transactions:
https://www.npci.org.in/what-we-do/upi/product-statistics
AliPay is a digital wallet and not an RTP bank-to-bank system, which is why it doesn't even register on any RTP ranking.
Well, even I could go around cherrypicking payment methods and claiming whatever I want.
If we include RTGS, USA does as much A2A RTPs in a week as India does in a year.
* USA: $805T / year.
* INDIA: $19T / year.
There's no comparison.
"Cherrypicking" ? Look up at the story title - digital currency in India. Look up a lot less at the bloody comment topic - the use of ATMs in India.
I stated that India does not use cash anywhere as much as it did even a year, much less 5 years ago - over a quarter of all transactions have moved to UPI, which grew from $0 to $1 trillion in annual transactions in 5 years. One can quite easily get around town or the country without ever touching cash or an ATM.
It's all because India build an RTP system and grew it 1000x in just 5 years to the world #1 position. It's everywhere. I can use it for everything from plane tickets to the footwear storage and offering at the local Hindu temple.
It's simply remarkable - a country with a per capita income of $2500 being able to build out and operate a fintech platform of such scale and ubiquity in such a short time that people who may have last been in India 3-4 years ago would never be able to grasp how much has changed.
What's your response instead ?
<Something else> from China does a lot more.
<Something else> from USA does a lot more.
No shit. Go on, wander off yelling at the clouds about USA or China or wherever.
China's Alipay *is* RTP. USA's RTGS *is* RTP. There's no <something else> about them. They both exceed India's RTP value (UPI + RTGS) by a mile.
Kudos to UPI for what it has accomplished but that's not the topic here. Your claim that India does #1 RTP processing value in the world is total BS. Not one of the sources you posted supports your claim that India's $1T RTP value is the highest value of RTP processed by any country in the world.
But let this not stop you from posting dubious data and changing the topic when your BS is called out in public.
I've yet to see an actual statement about how they (or anyone talking about implementing a digital currency) plan to release these digital currencies into the market.
If 1 digital rupee = 1 actual rupee, then if you simply say that every digital rupee has an equivalent actual rupee then you've just doubled the rupees in supply, and with that comes massive devaluation of your currency (it's now worth half of what it was yesterday), and say hello to crippling inflation.
Printing new money is generally a bad idea, unless it's regulated in such a way that you are really just keeping the overall quantity of money in the pot identical. So replacing old and worn out notes, effectively.
About the only way I see you could add a digital currency without destroying your economy, would be basically to stop printing actual money, and start "producing" digital currency at the same rate as you would be printing actual money. But this carries some pretty big risks. I mean take up of your digital currency will be slow because there wont be much of it around to start with (I suppose you could televise a big bonfire of actual rupees, and then claim here are the digital equivalents, but that sort of thing does not tend to go over very well with the public! Literally burning money is never going to be a vote winner!), when you stop production of the actual rupees you need to keep your mint personnel employed because that's not a skill base you really want to lose because you are eventually going to want to start producing real money again (if you want a balanced economy at least), and if you're not careful those very people making your real rupees, finding themselves without employment might find themselves deciding to use their skills to produce counterfeit rupees that look amazingly like the real thing! This sort of digital currency also emphasises the technological divide in your population and is likely to affect the poorest groups most. Those that carry the pitchforks and have the least too lose...
But as has already been mentioned, our bank cards do all of this already, if they want the digital economy to work better, then put in some more regulations on the banks and force them to do their transactions faster, let them hold on to our money for less time (the longer they have it, the more they can profit), but there is zero need to go and reinvent the currency wheel...
In the UK, there is £95bn of notes and coins in circulation vs about £3tn of money in bank accounts.
The money in bank accounts is effectively digital currency. You can transfer it to another bank account in about 3 seconds, you can use Apple Pay or Google Pay on your phone to pay for just about everything, even at street traders
"You can transfer it to another bank account in about 3 seconds"
If it's the same bank, yes. Another bank, it usually is transferred overnight and clears to the receiving account the next day. If you want it faster, you have to pay. If its overseas, you possibly have to wait more. If it involves a currency transfer, you also have to pay a fee and/or take a hit on the rate.
The UK has "Faster Payments", a scheme for fast transfers between the banks that use it. Payments are pretty much instant. It's free, and is the normal way of making smaller transfers. (There is a limit of a few thousand pounds, so bigger payments have to go through the old overnight system).
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