Cyber Risk Challenges in UPI and CBDC

Fraud often occurs in debit/credit cards and internet banking payments. To address this, Central Banks developed CBDC to enhance payment security and reduce financial losses from cybercrime. In this study, we modeled cyber risks through a utility-based framework and conducted simulations to compare CBDC with traditional payment systems. Our findings strongly support CBDC, emphasizing its role in mitigating cyber risks and improving the efficiency of domestic and international payment networks.