· Countries with a lot of physical money consumption (e.g. Denmark, Germany, Japan, even the USA) who want to make the problem more efficient.
· Central banks are working to meet the public demand for digital currencies, which is reflected in the growing use of private cryptocurrencies, thus preventing further damage to such private currencies. .
The wallet ecosystem is widespread on the Unified Payment Interface (UPI) network familiar to Indians.
However, CBDCs are different in that the central bank controls the infrastructure and payments are made directly in currency issued by the central bank (rather than from commercial bank reserves).
A centralized payment system avoids the risk of the payment system being concentrated in the hands of individuals. Moreover, such a system minimizes settlement risk as the entire system is supported by the state.
CBDC-based networks can lead to real-time transactions, establish a globalized payment system with minimal transaction costs, increase transparency and create trust in the business environment.
Digital currencies also enable programmable money and, when combined with India's JAM trinity (linking Jan Dan accounts, Adhar and mobile phones), could herald innovations in public welfare systems and financial inclusion.
For example, governments can minimize leakage and corruption by setting expiry dates on the spending of the subsidies they provide and regulating where the subsidies are spent (such as education and housing).
Digital currency will also reduce central bank logistics costs associated with printing, transporting, storing and distributing currency.
As such, CBDCs aim to bring fiat currencies the benefits of cryptocurrencies, such as programmable money, increased transparency, and reduced logistics costs, without the drawbacks of anonymity and lack of control.
At the same time, the architectural design of this digital currency requires careful consideration.-->