Page 23 - Banking Finance May 2024

ARTICLE

WHY CBDC

WHEN WE

HAVE UPI..??

T he world is rushing to develop Cash 2.0. Globally, your country. This makes it super secure.CBDC works like a
central banks are in pursuit of Central Bank
digital version of the money you have in your wallet. It's
Digital Currency (CBDC) projects. More than 100
backed by the government, just like your regular cash. You
countries, representing over 95% of global GDP,
carrying your country's money in your phone.
are exploring CBDCs. While some have already deployed e- can use it to pay for things and do business online. It's like
currencies, others are either running pilots or developing
them. Such e-currencies are a hotly debated subject of UPI - Unified Payments Interface:
curiosity, confusion and even concern. Yet, no one wants to Have you ever wanted to send money to a friend
be left behind the curve. immediately, even if they're in a different bank? UPI makes
this possible. It's like magic for your mobile, allowing you to
CBDC - Central Bank Digital Currency: transfer money from one bank account to another right

Imagine if your country's money could also exist on your away.UPI, on the other hand, is like a bridge between
phone or computer. That's CBDC. It's like a digital version different banks. You can use it to send money directly from
of your regular money, but it's controlled by the big bank in your bank account to your friend's account, without needing
cash or waiting. It's like texting money.

After cryptos became popular, with Millennials and Gen-Z
users experimenting with them in some form, central banks
felt they had to step on the gas to deliver a next-generation
payments vehicle that can flaunt the convenience of cash
and characteristics of crypto. Most central banks have
added the prefix 'e' to their respective currency names for
end-user comfort and familiarity.

BANKING FINANCE | MAY | 2024 | 21