The Hindu Editorial Vocabulary– July 26, 2021; Day 107

The importance of reading editorials of reputed newspapers is not hidden from anybody. What causes obstruction are difficult words which act like speed-breakers forcing you to either refer to a dictionary for its meaning or simply guess it. While getting the meaning from the dictionary is the best way to understand it, sometimes a dictionary is not within your reach. Also, a number of aspirants get confused when they see more than one meaning next to a word in a dictionary. It becomes a difficult process for them to pick the relevant meaning.

We at PracticeMock understand this and that’s why we have come up with a series of Editorials’ Difficult Words where we shortlist the important editorials of the day and pick the difficult words/ phrases therein. Next to the word, we put only the contextual sense of the word/ phrase so that you don’t get confused. Now let’s go through today’s editorial.

Money changer: On need for an official digital currency

India needs to move forward on introducing an official digital currency

In contrast to India’s continued ambiguity (the quality of being open to more than one interpretation; inexactness) over the legality of cryptocurrencies, its stance (a way of thinking about something, especially expressed in a publicly stated opinion) on introducing an official digital currency has been reassuringly clear and consistent over time. And, four years after an inter-ministerial committee recommended that India launch fiat money (a government-issued currency that is not backed by a commodity such as gold) in digital form, the Reserve Bank of India has indicated that pilot projects (an initial small-scale implementation that is used to prove the viability of a project idea) to figure out its viability (ability to work successfully) are likely to be launched soon. In a speech a few days ago, T. Rabi Sankar, Deputy Governor, RBI, said, “RBI is currently working towards a phased implementation strategy and examining use cases which could be implemented with little or no disruption.” The clarity is welcome, given that the much-awaited Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is yet to be introduced. In recent years, the significant rise of private cryptocurrencies such as Bitcoin and Ether has spooked (frighten) central banks throughout the world, and pushed the case for official digital currencies. Mr. Rabi Sankar himself cited a 2021 BIS survey of central banks, which found that 86% were actively researching the potential for such currencies, 60% were experimenting with the technology, and 14% were deploying pilot projects. China, having already engaged in pilot projects for its digital RMB, is in fact planning a major roll-out (officially launch or introduce a new product or service) soon. There has been little doubt, therefore, that India needs a digital rupee. The important questions are about the details and the timeline (a schedule for when a process or procedure will be carried out).

There are crucial decisions to be made about the design of the currency with regards to how it will be issued, the degree of anonymity (the quality or state of being unknown to most people) it will have, the kind of technology that is to be used, and so on. It is possible that the question of the degree of anonymity, especially, will be quite a challenging one. While official digital currencies can borrow the underlying technology feature of private cryptocurrencies, they significantly differ from the latter in their philosophy and goals. Also to be considered are possible impacts of the introduction of an official digital currency on people, the monetary policy, and the banking system. There are risks to be considered as well, not the least of which will be those emerging from cyberattacks. What is more, many laws need to be amended to make the digital rupee a reality. So, while India might have done exceedingly well in digital payments in recent years — the Deputy Governor said they have grown at a compounded annual growth rate (the mean annual growth rate of something over a specified period of time longer than one year) of 55% over the last five years — the digital rupee will be something else altogether. Notwithstanding all these challenges, it would seem that the answer to Mr. Rabi Sankar’s speech title, ‘Central Bank Digital Currency – Is This the Future of Money’, is a yes.

Hope you got to know some new words/phrases which will definitely be useful in the English section of upcoming competitive exams. Wishing you all the best for your preparation!

Want to improve your vocabulary further? Download the Lists of Word-Meanings of Previous Months here.