CBDC (Central Bank Digital Currencies) adoption is now slow in India

CBDC (Central Bank Digital Currencies) was officially launched in India and during its trial phase, there were 5 million users. Central bank digital currency is the digital form of yet currency where value is the same as sphere currency it does not fluctuate. India is one of the countries that launched their digital currencies quite early but now the adoption is slow and probably it is because there is no incentivization for the people who adopt it. Currently, most of the banks have launched this service and the mobile applications are available on both popular operating platforms. I am talking about the Android and Apple iOS where the banks develop applications and are available for the users. All the leading banks are offering this facility free of charge and even some of the banks are offering some incentives for using this.

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CBDC Pilot ended in June

Earlier the government started its pilot project where some selected users were invited to use the service and the response was more than expected. Certainly, it was great because people got the opportunity to use fiat currency in digital form and it is one of the safest ways to use the currency in the country. It was also possible to make the payment to a merchant using central bank digital currency and this is what adds another use case to this. The pilot ended in June month this year and by that time it was able to gain 5 million users which is a good user base undoubtedly.

Wallet Creation

I was also invited by my bank to try this service and the initial setup was quite easy. I just downloaded the application from the Play Store and provided some information to create the wallet which hardly took one minute. Once the wallet was created then I got the option to load the wallet using different payment options. Once the money is loaded in the wallet then I can use it to transfer it to another individual or I can also use the money for spending at a merchant outlet. That's not all because I was also able to see the option for receiving CDC which is person to person money transfer.

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Adoption is slow now

Although it started with significant growth even when the project was in the pilot stage now the adoption was slow. The government is expecting that they can bypass the crypto adoption and people would go more with the CBD C which I think is not going to happen. General why it is not possible since the CBDC is a copy of a currency in digital form. With crypto we have the opportunity to make money because prices fluctuate but CBDC offers only the option to make digital payments however there is no incentivization and also there is no chance to make money.

This way we can say that the use case for crypto and CBD C is completely different and in no way one can replace the other. But the approach the government is following is also not the right one since they will never be able to replace crypto with CBDC and if they try then probably it will affect the crypto industry however it will not benefit the CBDC for sure. In India, there are multiple mobile wallets available that are free to use and their user base is much bigger than CBDC. They also offer certain benefits and promotional offers to the users which is why they have got massive user base using their wallet services.

I downloaded the application and tried it for a couple of days but then I stopped using it. It's been many months since when I did not even open the application but I use other wallet applications in my day-to-day life. There are so many people like me who have done the same and this is why the earlier adoption was good however now the growth is stuck because of different reasons. Recently there has also been news that the government is trying to ban crypto which I don't think is practically possible and they are going to encourage people to start using CBDC more. I am surprised that even after many years the government is not able to understand what crypto is and CBDC has nothing to do with crypto. Although it is a possibility that the government allow the use of CDC for the buy and sell of crypto and if this happens then surely the use of CBDC will enhance.

Thank you

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