On Friday, the Reserve Bank of India (RBI) published its Report on Currency and Finance. It included some observations about central bank digital currency (CBDC). But it’s fair to say the central bank didn’t reveal anything about its own plans and the report only spent a few paragraphs on the topic.
RBI highlighted some CBDC benefits, such as a central bank’s ability to monitor transactions and distribute ‘helicopter money’ as aid during difficult times. It also noted the potential to target money distribution towards particular goods to either improve demand or aid social welfare.
While not mentioned in the report, India has an existing food ration system targeted at those below the poverty line (BPL). In that case, citizens are issued with BPL cards which enables them to buy food at heavily subsidized prices. If a CBDC could be made sufficiently accessible through a card, that might work here.
To address corruption, the government of Telangana is already trialing blockchain for this public distribution system for rations. Its commonplace for food to be adulterated or diluted and lower quality grains are often substituted. Whether or not blockchain can help with that remains to be seen. However, it might aid in pinpointing where in the supply chain the corruption occurred.
Read more: https://www.ledgerinsights.com/reserve-bank-of-india-comments-on-cbdc/