Central Bank Digital Currency: Driving the Shift Towards a Global Cashless Society

Abstract

The evolution of money from traditional physical cash to Digital Currency marks a significant paradigm shift in the global financial landscape. This conceptual paper provides an overview of the emerging form of central bank money known as Central Bank Digital Currency (CBDC) and its progression amidst the digitalization era. It discusses the transition from cash to CBDC, exploring global advancements and initiatives. Drawing upon existing literature, it comprehensively addresses CBDC's forms, features, types, motivations, and implications. Specifically, it emphasizes the practical application of CBDC through pilot projects in India, highlighting the interoperability of Unified Payments Interface (UPI) with CBDC, a significant step towards adoption by the Reserve Bank of India (RBI). This study contributes to existing literature by highlighting the necessity for further research to understand the complexities and implications of CBDC adoption, crucial for its widespread acceptance. It underscores the imperative need for additional research and practical exploration to fully understand the ramifications of CBDC adoption, particularly within the Indian context and beyond.