India's UPI system manages tens of billions of transactions without CBDCs. Pretty much proof that any potential benefits of CBDCs can already be achieved with existing systems.
This is the piece that complicates my thinking about CDBC and digital transfer systems. What UPI does is seamless and instant transfer of Indian Rupees between parties and it is widely adopted. So why would India need, or benefit from additional CDBC? I can see how CDBC's instant transfer scheme would benefit the US which does not have digital transfer systems that are both instant and close to zero-cost.
So why would India need, or benefit from additional CDBC?
What makes the UPI system work *is* effectively a CBDC. It's not possible to have instant transfer without *something* that functions like a CBDC --- though it may be named something else. The EU calls theirs a "credit transfer scheme" --- same difference.
The word that seems to be confusing people is the word *currency*.
A CBDC will be used by *banks* to benefit consumers but it is not something that consumers will consciously partake of. Consumers won't carry CBDC in their pocket or in a special digital wallet.
One way to look at it is that a CBDC would be used to add the functionality of digital wallet to everyone's existing bank account.
