Page 110 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
Challenges of CBDC:
Individuals using the Internet Internet Usage is a Big Challenge
(% of Population) India is the recorded as 2nd Largest online
market in the world, which is ranked only
behind China, based on a recent survey
India has recorded over 560 million internet
users. And it was estimated that by 2023,
there would be over 650 million internet
users in the country. As India has a large base
of internet users, the Internet Penetration
Rate in the country has stood at nearly 50 %
in the year 2020.

This meant that around half of the 1.37 billion
Indians had internet access that year. There
has been a steady raise in the accessibility of
the internet when compared to just 5 years
ago when the internet penetration rate was
nearly 27%.
 Because CBDC is held on the Balance  Users may react negatively if a
Sheet of a Central Bank, if there is a large Technology supposed to be private is
demand for them, the Balance Sheet may Centralized by the Government, posing
expand. Cybersecurity Issues.
 Moreover, the Central Bank may be Countries where CBDCs have been launched:
required to offer Additional Liquidity to Nearly 100 countries were dynamically
the Banks, which results in the Central evaluating Central Bank Digital Currencies
Bank taking on the Credit Risk. (CBDCs). Here’s a run-down of the countries
that have already rolled out their digital
 Citizens may withdraw an excessive currencies and some of those that are on the
amount of money from banks at once
cusp of doing so.
and purchase CBDCs, resulting in a Bank
Run.

The Bahamas  The Sand Dollar was issued by the Central Bank of the
Bahamas in October 2020. And recorded as the first
nationwide CBDC in the world.

 In the Bahamas, part of the population cannot able to access
any kind of financial services because it is not profitable
for the commercial actors to operate in all areas in part
due to the country’s geography as it’s split up into many
different islands.

The Institute Of Cost Accountants Of India

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