Yesterday during a speech, Reserve Bank of India (RBI) Deputy Governor MD Patra discussed how tokenized deposits and central bank digital currency (CBDC) might impact deposit insurance.
Tokenized deposits are a digital version of bank deposits using blockchain infrastructure to process programmable payments 24/7. In a digital world, they compete with stablecoins and CBDCs, although the design is quite different.
From a deposit insurance perspective, most tokenized deposit infrastructures aim to maintain the same deposit insurance coverage as a conventional bank deposit. However, Mr Patra noted that tokenization potentially can amplify bank runs in times of stress.
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