RBI Grade B Interview:
When we already have UPI and Other Wallet based Payment Options then why do we need Digital Rupee?
UPI and CBDC are built to solve different problems and they’re meant to complement each other, not compete.
UPI is a digital rail, it moves money between bank accounts. It’s an infrastructure, built by NPCI, that connects banks, wallets, and merchants.
CBDC, on the other hand, is the money itself, a digital form of the rupee issued directly by the Reserve Bank of India. t’s like carrying a ₹500 note, but in your phone’s wallet.
So while UPI helps you transfer money, CBDC is the form of money you can hold, just like cash, but digital.
This part everyone know but most forget to Highlight the most important Keyword:
I. Programability
Imagine the government disbursing a subsidy that can only be spent on specific items say, education or healthcare. CBDC enables this kind of programmability, something that’s not possible with UPI today. Due to this feature multiple use cases are being tested.
II. Cross-Border Transfers
CBDC opens the door to cheaper, faster international remittances by enabling direct central bank-to-central bank settlement reducing intermediaries and costs.
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