REGULATING THE DIGITAL RUPEE: BALANCING PRIVACY AND INSTITUTIONAL CONTROL IN INDIA’S CBDC FRAMEWORK 

AUTHOR – DIVYADITYA SINGH JADAUN* & PROF DR ANIL DIXIT**

* LAW STUDENT, LAW COLLEGE DEHRADUN, UTTARANCHAL UNIVERSITY, DEHRADUN

** PROFESSOR, LAW COLLEGE DEHRADUN, UTTARANCHAL UNIVERSITY, DEHRADUN

BEST CITATION – DIVYADITYA SINGH JADAUN & PROF DR ANIL DIXIT, REGULATING THE DIGITAL RUPEE: BALANCING PRIVACY AND INSTITUTIONAL CONTROL IN INDIA’S CBDC FRAMEWORK, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 221-231, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

With a single move, India’s introduction of the Digital Rupee literally changes the entire Indian financial system. The country is now a front runner for the global Central Bank Digital Currency (CBDC) experiments. Intended as a supplement to the already existing digital payment instruments, the Digital Rupee is expected to make transactions quicker, less expensive, and more accessible to the unbanked population. Besides, it is supposed to decrease the economy’s reliance on cash in circulation. The questions behind this endeavour are, however, far, reaching in terms of regulation, constitution, and technology which the authors express in their article. This article constitutes a thorough analysis of the legal regime that governs the implementation of CBDC in India and especially with respect to the issues regulated innovation, confidentiality and state control. It questions whether the current statutory measures, which include the RBI Act, Payment and Settlement Systems Act, and Information Technology Act, are sufficient to govern the Digital Rupee, while also contemplating that there are gaps which require a separate legal framework. The article is devoted to privacy issues in shadow of the Supreme Court’s judgment in Puttaswamy, by which it points out dangers of transaction, level surveillance, data centralisation, and excessive state control. Besides, it weighs the conflict between the programmability of the account and the individual freedom, the AML/KYC obligations’ role, and the requirement for strong cybersecurity standards. 

In the end, the authors affirm that the Digital Rupee is packed with revolutionary potentials, yet the question of its permanence and eventual acceptance will be decided by the extent to which privacy, by, design principles, open governance, and explicit statutory safeguards are incorporated into it. Thus, a well, balanced regulatory model will not only stimulate innovation, but also preserve constitutional rights, so that India’s CBDC framework will be inclusive, accountable, and future, ready. 

Keywords: Digital Rupee; Central Bank Digital Currency (CBDC); Financial Regulation; Privacy Rights; Institutional Oversight.