Is RBI creating a new digital black money economy with their CBDC?
All this while, the government has been stressing the need for a cashless economy to avoid unaccounted transactions and created the highly successful UPI system to facilitate cashless transactions (which is in fact a far more advanced system than any such systems of the so-called advanced countries). Recently however, there have been reports of bribes being received using UPI by corrupt public servants in the names of their family members, but such payments can never be very large. Since these UPI-based transfers are still operated over bank accounts, it is quite possible to identify the bribe receivers (if the government is really serious), particularly for larger amounts. But with the CBDC in place, people can receive bribes with complete anonymity and impunity. I visualise a scenario with all the sub-registrars and RTOs and other miscellaneous babus rushing to create digital wallets in anticipation of future bonanza.
It is also not clear how rigorous is the protection of these digital wallets against hacking. Now in addition to patient data, our digital money may also be at risk of being stolen by Chinese hackers. Not to be left behind, our own home-grown crooks will also be busy devising new ways of relieving you of your digital cash a-la- Jamtara of OTT fame.
I am for one, quite happy with my GPay and PayTM apps which I use in place of small change; and do not foresee a situation where I will create a digital wallet for anonymity, which in my opinion is not required by any honest taxpayer like me. For larger expenses, there are cards still there, where we at least know how to safeguard ourselves from nefarious tricksters, mostly. more