Experts lend credence to digital currency

New Age Dynamics

- Digital payment (UPI) underlines physical cash in the system

- CBDC takes physical cash out of the equation

- It becomes part of the overall currency in circulation

- Reduces currency cost

- Buy now pay later (BNPL) market catching up

- BNPL may replace credit card

Mumbai: Experts feel that digital currency has a very strong usage.Saugata Bhattacharya, executive vice-president &chief economist at AxisBank, says: "Cryptos are basically gold on steroids, but there are certain characteristics, which need to be discouraged. Digitalcurrency has a very strong usage. It will be a powerful replacement ofcash. Payment will be made only with the delivery of product."

Differentiating between CBDC (central bank digital currency) and virtual digital assets, Sarmad Nazki,chief financial officer, CoinSwitch, said: "They both have very different objectives and use cases. In case of CBDC, you could think ofCBDC being a digitization of the bank note that you carry with youtoday. India has made a lot of progress in digital payments. Todayeven though you do digital payment (UPI), there is still underlinephysical cash in the system that represents the transaction. CBDCtakes physical cash out of the equation and becomes part of the overall currency in circulation. It has a very different purpose andone key benefit that comes out it is reduces the cost of management. Today there are some estimates where 15-17 percent is spent on 100 rupee note.The value is spent over a period of fourth year of lifecycle."

Talking about India's BNPL (buy now, pay later) landscape, Richa Mukherjee, Member Face,Director Public Policy & Corporate Affairs, Pay U India, said: "BNPLmarket is expected to reach $45-50dollar by 2026 from thepresent $3.5billion,which is targeting 15x growth andthe users are expected to rise to 8200 million customers from 10million customers by 2026."

"In India, BNPL is replacing credit card. BNPL will be the first formor alternate form of credit in India. More of smaller ticket size and shorter duration is where we will see many Indians trying credit cardfor the first time. Today in India, around 50-55 million credit cardsare issued to around 30-35 million Indian and in contrast to thataround 300 million Indians are paying digitally," added Upansana Taku, co-founder and chief operating officer, Mobikwik.

These comments were made at a daylong conference in Mumbai whichwas also attended by some well-known stalwarts such as Sabyasachi Goswami, Chief Business Officer,Perfios; Gaurav Hinduja, Co-founder & Managing Director, CapitalFloat; Siddharth Dhamija,amongt others.