Dr. Sindhu Bhaskar
4 min readMay 29, 2021


A work half-done is never a work well-done. Similarly, a work not even undertaken will reek of ignorance but read here incompetence or a dilemma. No country in any part of the globe should have such a vacillatory attitude towards a fast-emerging technology that will provide the fastest wings to the Central Bank and the Government of the land. This dilemma is more pronounced in countries having a democracy. Democracy is already decentralized political machinery and if further decentralized fintech is added then the cracks of underdevelopment and un-development will split open. Governments answerable to people will have no cover for themselves, is this the dilemma. We have a new breed of millennial economists and technocrats paving the way for a fintech revolution. These projects are chasing all the regulatory bodies in different countries and challenging them. Mobile play, basic peer-to-peer activities to disrupt the existing set up is the face of this movement.

It cannot be denied that the whole environment of the fintech is a place of uncertain certainties and uncertainties so we need not take a blind leap as well. Well, the factors for dilemma can be multiple but there can be no excuse in India for shouldering aside the torrents of development.

China is at the forefront. It introduced its CBDC in pilot form in the major city of Shenzhen and plans to use it in the 2022 Winter Olympics in Beijing. Mainland China and UAE have also joined the initiative, Project Inthanon-LionRock with Hong Kong and Thailand to create the Multiple CBDC bridge for cross-border fund transfers and real-time atomic settlement of forex transactions. Further DBS, J.P. Morgan, and Temasek of Singapore are jointly working to develop a blockchain-based clearing and settlement network for wholesale payments, which will initially focus on domestic multi-currency payments and is looking to onboard other Singapore banks. The network is seeking to use Singapore as a base and expand from there to other jurisdictions. Turning to wholesale CBDCs, the first is the ongoing Project Helvetia experiments with the Swiss National Bank, where there was a trial to connect the SIX Digital Exchange with a wholesale CBDC to enable instant settlement for blockchain transactions. United Kingdom is working on a CBDC which will sit with the RTGS payment system and will act as an additional option. Sweden has worked on the technology and positive and negative interest aspects even but yet to work on the monetary implications. Canada is working on CBDC so that it is not left behind in the race but thinks there is no urgency.

The only two active CBDCs are the Bahamas Sand Dollar, a retail CBDC, and Cambodia’s Project Bakong, a DLT based payment system for financial inclusion. When most of the countries of the world are discussing and creating purposeful assumptions for their country, then why should a country with a big economy like India should adopt a ‘touch me not attitude’ be it CBDC, cryptos, digital assets, exchanges or any product which is the byproduct of the fintech revolution.

Let us look at the political power matrix. CBDC is a Programmable Money that is why all countries have talked of Permissioned DLT. The smart logic of smart contracts can maneuver the monetary policy. M3 the money supply can be expanded or contracted with the Central govt ordering a freeze of interest or devaluation or vice versa thus even setting effective rates on assets held in personal custody. Just as with fiat, policymakers will decide how a CBDC is used. CBDCs would likely increase a government’s ability to oversee transactions.

China is the biggest trade partner in 120 countries. All transactions are settled in US Dollars presently even though the Chinese Renminbi is the third-largest currency in the world. China says it is not trying to replace the dollar with the digital yuan, and that the “goal is to allow the market to choose” how to settle international transactions. And the obvious answer is very open here, China can say anything. The currency domination and supremacy war can continue with CBDC as well. Thus even this should not be a reason to move away from CBDC.

When multiple CBDCs will get collected during any trade settlement, do we expect that the dominant country in the consortium will run away with our currency nationalism? No, it can never happen. We have seen the ages of Precious metals like Gold with Bretton Woods and SDRs, a basket of currencies, and the dollarization of the global economy. Do we expect to have similar dollarization of CBDC, absolutely not? Already there are talks of creating another neutral international stable coin to act as the mean median mode for of the settlement.

Any country can have all the safety measures with Wholesale as well as retail CBDCs. Perhaps the biggest risk is cybersecurity. So it is better to have a Hybrid CBDC with the Central Bank as the issuer and the banks, financial intermediaries, and institutions as the Retailers directly connected to the Users and creating the KYC and AML checks and maintaining the transactions records. The central bank also creates the final transactional and settlement record so that in case of any untoward outage, no record is lost and the Central bank can perform its role as the real responsible repository.

So the political leaders should know, that all powers are intact and new powers also get added with the ability to create incentives through programmable money and to keep track of digital transactions. The dilemma is misplaced and unwanted. We need to do the course correction.



Dr. Sindhu Bhaskar

Focused on creating financial inclusion, he is working on a digital open banking project using DLT and Blockchain backed by digital-gold-asset MACHU.