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The Reserve Bank of India (RBI) has reportedly asked the banks to not report low-value transactions made through the digital rupee to ensure that it offers the same degree of anonymity as dealing with cash. According to a report by Economic Times (ET), once the Central Bank-backed Digital Currency (Retail) is transferred to the wallets of the customers, banks will not track the transactions.
“These transactions don’t leave a trace in the core banking system and that’s why they are more anonymous than the current digital transactions,” a senior banker told ET. They added that this is why RBI has asked the banks to not report these transactions.
No limit for transactions via CBDC-R has yet been announced by the RBI. But for cash transactions, banks require the customers to provide their PAN card only if they are over Rs 50,000. Experts believe that the Rs 50,000 limit will be kept for CBDC-R as well.
“The CBDC-R gives far greater anonymity because the transactions are not hitting your bank account. Once you move the money to the wallet, they will not be reported,” said another banker. The authorities will know how much CBDC-R is being circulated, but they will not know who owns how much.
However, the central bank is also working on ways to prevent money laundering that may happen via CBDC-R.
“While the transactions will be anonymous, CBDC-R will always be traceable…Limited traceability and record keeping are important but how limited and how long it will be is all under formulation by the RBI. The central bank is working on the anonymity idea but it will take a very long time because it has to reconcile this with the anti-money laundering and other requirements,” another official told ET..
On December 1, some users will receive a CBDC wallet containing notes signed by the RBI governor.
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