#FactCheck-Mosque fire in India? False, it's from Indonesia

Introduction

In a groundbreaking move, India's Reserve Bank has embarked on a transformative journey with its Central Bank Digital Currency (CBDC) project. As the world grapples with the evolving landscape of digital finance, the implications of India's CBDC initiative extend beyond its borders, potentially reshaping global payment systems. The Union Minister of State for Finance, Shri Pankaj Chaudhary, revealed that on October 7, 2022, the Reserve Bank of India released a proposal note on Central Bank Digital Currency (CBDC). Two pilot projects using blockchain-based technology are described in the concept note: Digital Rupee-Wholesale (e₹-W) and Digital Rupee-Retail (e₹-R). Launched on November 1, 2022, the bulk trading pilot aims to increase intermediary competitiveness, particularly in the resolution of trades in the secondary market involving sovereign debt. In parallel, on December 1, 2022, the retail banking pilot, known as e₹-R, got underway in a limited user group with eight banks taking part in stages.

The digital asset known as e₳-R is issued across financial institutions for Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions. It is intended to serve as a virtual currency that represents legal money and exhibits characteristics similar to actual cash. Based on input gathered during the continuing trial phases, the RBI intends to progressively broaden the pilot project's scope.

Central Bank Digital Currency Pilot Projects

Central Bank Digital Currency (CBDC), which the Central Bank of India is promoting, may easily perform an essential part in payments made across borders, according to Reserve Bank Governor Shaktikanta Das. The CBDC is going to be expanded to the international financial markets after being implemented as a trial in both the retail and wholesale industries.

CBDC in International Payments

He emphasized that although physical currency will still exist, the CBDC will eventually replace all forms of money worldwide.  

"CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC," he stated. He also stated that as worldwide commerce moves more and more around science and technology, CBDCs will play a significant role since they can effectively and affordably speed up payment processing across different countries. Regarding India's foreign exchange reserves, the governor stated that the selection to increase the resources as a safety net and protection versus contagion possibilities was made consciously.

CBDCs' Place in the Transnational Economic Revolution

In certain economies worldwide, having a CBDC internationally accessible could lead to more replacements for foreign currencies rather than the home currencies, which could cause financial aggregates to become volatile and change the mix of instruments of exchange.

CBDC may have benefits related to first-mover savings of scale, and other consequences even in everyday circumstances. If nations with global currencies have established CBDCs, they could strengthen current advantages and disadvantages, including consequences, particularly in terms of revenue. In a similar vein, CBDC might alter the structure of international liquidity while safeguarding asset supply. Additionally, and particularly if imposed abruptly, CBDC may, in certain circumstances, result in significant capital movements and associated repercussions on the foreign exchange rate as well as additional asset prices. Furthermore, nations may encounter difficulties in getting ready for virtual currencies issued by central banks.

The worldwide and international scope of CBDCs accessible to immigrants may become particularly apparent in situations where there is a widespread flight safety concern. In these circumstances, converting a CBDC into a foreign currency would make it possible for capital markets to deleverage more quickly. The elimination of debt challenges could show up as tight finance constraints and abrupt swings in foreign exchange markets if CBDCS expedited its flight from uncertainty.

Deposits of Foreign Exchange and Self-Dependency

Reserve Bank Governor Shaktikanta Das stated "We must rely on ourselves. We must maintain our robust reserves. In order to achieve that goal, we have been amassing quite substantial reserves, and the outside world has come to feel quite confident that India would be able to fulfil its contractual responsibilities to the international community no matter what the obstacles," 

Involvement of RBI in the Currency Market

Given that the trading community was confident that the Reserve Bank of India would be capable of and able to fulfil its contractual responsibilities, the value of the Indian rupee did not decline as dramatically. The RBI governor stated that the RBI does participate in the economy, but that "our engagement operates in two ways," he would not hesitate to acknowledge this.

The Value of Macroeconomic and Budgetary Cooperation

According to RBI Governor Das, the RBI makes purchases and sales of dollars based on the direction in which the financial sector is trending. However, the RBI does not intend to set a certain level for the rupee because it does not consider any specific threshold for the Indian rupee's conversion rate against the US dollar. He also emphasized how crucial it is for both the financial and monetary authorities to work together.

Conclusion

India's CBDC project signals a transformative shift in the global digital finance landscape. Governor Shaktikanta Das envisions CBDCs as the future global currency, emphasizing their role in international payments. The potential impact on financial systems, cross-border transactions, and the need for self-reliance underscore the significance of India's CBDC initiative in shaping the evolving dynamics of the digital economy. As the project progresses, close cooperation between financial and monetary authorities becomes imperative for navigating the challenges and opportunities associated with this groundbreaking venture.

References

• https://economictimes.indiatimes.com/news/economy/policy/central-bank-digital-currency-can-play-important-role-in-cross-border-payment-rbi-guv/articleshow/104706717.cms
• https://www.bis.org/cpmi/publ/d174.pdf
• https://bfsi.economictimes.indiatimes.com/news/fintech/explained-how-rbi-is-leveraging-upi-to-push-the-use-of-retail-cbdc/103591989
• https://www.imf.org/en/News/Articles/2022/02/09/sp020922-the-future-of-money-gearing-up-for-central-bank-digital-currency
• https://www.business-standard.com/economy/news/cbdc-pilot-projects-show-promising-results-rbi-governor-shaktikanta-das-123102601171_1.html

Modern international trade heavily relies on data transfers for the exchange of digital goods and services. User data travels across multiple jurisdictions and legal regimes, each with different rules for processing it. Since international treaties and standards for data protection are inadequate, states, in an effort to protect their citizens' data, have begun extending their domestic privacy laws beyond their borders. However, this opens a Pandora's box of legal and administrative complexities for both, the data protection authorities and data processors. The former must balance the harmonization of domestic data protection laws with their extraterritorial enforcement, without overreaching into the sovereignty of other states. The latter must comply with the data privacy laws in all states where it collects, stores, and processes data. While the international legal community continues to grapple with these challenges, India can draw valuable lessons to refine the Digital Personal Data Protection Act, 2023 (DPDP) in a way that effectively addresses these complexities.

Why Extraterritorial Application? 

Since data moves freely across borders and entities collecting such data from users in multiple states can misuse it or use it to gain an unfair competitive advantage in local markets, data privacy laws carry a clause on their extraterritorial application. Thus, this principle is utilized by states to frame laws that can ensure comprehensive data protection for their citizens, irrespective of the data’s location.  The foremost example of this is the European Union’s (EU) General Data Protection Regulation (GDPR), 2016,  which applies to any entity that processes the personal data of its citizens, regardless of its location. Recently, India has enacted the DPDP Act of 2023, which includes a clause on extraterritorial application.

The Extraterritorial Approach: GDPR and DPDP Act

The GDPR is considered the toughest data privacy law in the world and sets a global standard in data protection. According to Article 3, its provisions apply not only to data processors within the EU but also to those established outside its territory, if they offer goods and services to and conduct behavioural monitoring of data subjects within the EU. The enforcement of this regulation relies on heavy penalties for non-compliance in the form of fines up to €20 million or 4% of the company’s global turnover, whichever is higher, in case of severe violations. As a result, corporations based in the USA, like Meta and Clearview AI, have been fined over  €1.5 billion and €5.5 million respectively, under the GDPR. 

Like the GDPR, the DPDP Act extends its jurisdiction to foreign companies dealing with personal data of data principles within Indian territory under section 3(b). It has a similar extraterritorial reach and prescribes a penalty of up to Rs 250 crores in case of breaches. However, the Act or DPDP Rules, 2025, which are currently under deliberation, do not elaborate on an enforcement mechanism through which foreign companies can be held accountable. 

Lessons for India’s DPDP on Managing Extraterritorial Application 

1. Clarity in Definitions: GDPR clearly defines ‘personal data’, covering direct information such as name and identification number,  indirect identifiers like location data, and, online identifiers that can be used to identify the physical, physiological, genetic, mental, economic, cultural, or social identity of a natural person. It also prohibits revealing special categories of personal data like religious beliefs and biometric data to protect the fundamental rights and freedoms of the subjects. On the other hand, the DPDP Act/ Rules define ‘personal data’ vaguely, leaving a broad scope for Big Tech and ad-tech firms to bypass obligations. 
2. International Cooperation: Compliance is complex for companies due to varying data protection laws in different countries. The success of regulatory measures in such a scenario depends on international cooperation for governing cross-border data flows and enforcement. For DPDP to be effective, India will have to foster cooperation frameworks with other nations. 
3. Adequate Safeguards for Data Transfers: The GDPR regulates data transfers outside the EU via pre-approved legal mechanisms such as standard contractual clauses or binding corporate rules to ensure that the same level of protection applies to EU citizens’ data even when it is processed outside the EU. The DPDP should adopt similar safeguards to ensure that Indian citizens’ data is protected when processed abroad.
4. Revised Penalty Structure: The GDPR mandates a penalty structure that must be effective, proportionate, and dissuasive. The supervisory authority in each member state has the power to impose administrative fines as per these principles, up to an upper limit set by the GDPR. On the other hand, the DPDP’s penalty structure is simplistic and will disproportionately impact smaller businesses. It must take into regard factors such as nature, gravity, and duration of the infringement, its consequences, compliance measures taken, etc.
5. Governance Structure: The GDPR envisages a multi-tiered governance structure comprising of   

• National-level Data Protection Authorities (DPAs) for enforcing national data protection laws and the GDPR, 
• European Data Protection Supervisor (EDPS) for monitoring the processing of personal data by EU institutions and bodies,  
• European Commission (EC) for developing GDPR legislation
• European Data Protection Board (EDPB) for enabling coordination between the EC, EDPS, and DPAs

In contrast, the Data Protection Board (DPB) under DPDP will be a single, centralized body overseeing compliance and enforcement. Since its members are to be appointed by the Central Government, it raises questions about the Board’s autonomy and ability to apply regulations consistently. Further, its investigative and enforcement capabilities are not well defined.

Conclusion 

The protection of the human right to privacy ( under the International Covenant on Civil and Political Rights and the Universal Declaration of Human Rights) in today’s increasingly interconnected digital economy warrants international standard-setting on cross-border data protection. In the meantime, States relying on the extraterritorial application of domestic laws is unavoidable. While India’s DPDP takes measures towards this, they must be refined to ensure clarity regarding implementation mechanisms. They should push for alignment with data protection laws of other States, and account for the complexity of enforcement in cases involving extraterritorial jurisdiction. As India sets out to position itself as a global digital leader, a well-crafted extraterritorial framework under the DPDP Act will be essential to promote international trust in India’s data governance regime.

Sources

• https://gdpr-info.eu/art-83-gdpr/ 
• https://gdpr-info.eu/recitals/no-150/ 
• https://gdpr-info.eu/recitals/no-51/ 
• https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf 
• https://www.eqs.com/compliance-blog/biggest-gdpr-fines/#:~:text=ease%20the%20burden.-,At%20a%20glance,In%20summary 
• https://gdpr-info.eu/art-3-gdpr/ 
• https://www.legal500.com/developments/thought-leadership/gdpr-v-indias-dpdpa-key-differences-and-compliance-implications/#:~:text=Both%20laws%20cover%20'personal%20data,of%20personal%20data%20as%20sensitive. 

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Smart Wearable devices are designed to track several activities in defined parameters and are increasingly becoming a part of everyday life. According to Markets and Markets Report, the global wearable tech market is projected to reach a staggering USD 256.4 billion by 2026. One of the main areas of use of wearable devices is health, including biomedical research, health care, personal health practices and tracking, technology development, and engineering. These wearable devices often include digital health technologies such as consumer smartwatches that monitor an individual's heart rate and step count, and other body-worn sensors like those that continuously monitor blood glucose concentration. 

Wearable devices used by the general population are getting increasingly popular. Health devices like fitness trackers and smartwatches enable continuous monitoring of personal health. Privacy is an emerging concern due to the real-time collection of sensitive data. Vulnerabilities due to unauthorised access or discrimination in case of information being revealed without consent are the primary concerns with these devices. While these concerns are present a lot of related misinformation is emerging due to the same. 

While wearable devices typically come with terms of use that outline how data is collected and used, and there are regulations in place such as EU Law GDPR, such regulations largely govern the regulatory compliances on the handling of personal data, however, the implementation and compliances by the manufacturer is a one another aspect which might present the question on privacy protection. In addition, beyond the challenge of regulatory compliance, the rise of myths and misinformation surrounding wearable tech presents a separate issue. 

Common Misconceptions About Privacy with Wearable Tech

• With the rapid development and growth of wearable technology their use has been subject to countless rumours which fuel misinformation narratives in the minds of general public. Addressing these misconceptions and privacy concerns requires targeted strategies.
• A prevalent misconception is that they are constantly spying on users. While wearable devices collect users’ data in real time, their vulnerability to unauthorised access is similar to that of a non-wearable device.  The issue is of consent when it comes to wearable technology because it gives the ability to record.  If permissions are not asked when a person is being recorded then the data is accessible to external entities.
• There is a common myth that wearable tech is surveillance tool. This is entirely a conjecture. These devices collect the user data with their prior consent and have been created to provide them with real-time information, most commonly physical health information. Since users choose the information shared, the idea of wearable tech serving as a surveillance tool is unfounded.
• Another misconception about wearable tech is that it can diagnose medical conditions. These devices collect real-time health data, such as heart rate or activity levels, they are not designed for medical diagnosis. The data collected may not always be accurate or reliable for clinical use to be interpreted by a healthcare professional. This is mainly because the makers of these devices are not held to the safety and liability standards that medical providers are.
• A prevalent misconception is that wearable tech can cure health issues, which is simply untrue. Wearable tech devices are essentially tracking the health parameters that a user sets. It in no way is a cure for any health issue that one suffers from. A user can manage their health based on the parameters they set on the device such as the number of steps that they walk, check on the heart rate and other metrics for their mental satisfaction but they are not a cure to treat diseases. Wearable tech acts as alerts, notifying users of important health metrics and encouraging proactive health management.

Addressing Privacy and Health Concerns in Wearable Tech

Wearable technology raises concerns for privacy and health due to the colossal amount of personal data collected. To address these, strong data protection measures are essential, ensuring that sensitive health information is securely stored and shared only with consent. Providing users with control over their data is one of the ways to build user trust. It includes enabling them to opt in, access, or delete the data in question. Regulators should establish clear guidelines, ensuring wearables ensure the compliances with data protection regulations like HIPPA, GDPR or DPDP Act, whichever is applicable as per the jurisdiction. Furthermore, global standards for data encryption, device security, and user privacy should be implemented to mitigate risks. Transparency in data usage and consistent updates to software security are also crucial for protecting users' privacy and health while promoting the responsible use of wearable tech.

CyberPeace Insights

• Making informed decisions about wearable tech starts with thorough research. Start by reading reviews and comparing products to assess their features, compatibility, and security standards. 
• Investigate the manufacturer’s reputation for data protection and device longevity. Understanding device capabilities is crucial. One should evaluate whether the wearable meets their needs, such as fitness tracking, health monitoring, or communication features. Consider software security and updates, and data accuracy when comparing options.  Opt for devices that offer two-factor authentication for an additional layer of security.
• Check the permissions requested by the accompanying app; only grant access to data that is necessary for the device's functionality. Always read the terms of use to understand your rights and responsibilities regarding the use of the device. Review and customize data-sharing settings for better control to prevent unauthorised access.
• Staying updated on the tech is equally important. A user should follow the advancements in wearable technology be it regular security updates, or regulatory changes that may affect privacy and usability. This ensures getting tech that aligns with user lifestyle while meeting privacy and security expectations.

Conclusion

Privacy and Misinformation are key concerns that emerge due to the use of wearable tech designed to offer benefits such as health monitoring, fitness tracking, and personal convenience. It requires a combination of informed decision-making by users and stringent regulatory oversight to overcome the issues that emerge due to misinformation about these devices. Users must ensure they understand the capabilities and limitations of their devices, from data accuracy to privacy risks. Additionally, manufacturers and regulators need to prioritise transparency, data protection, and compliance with global standards like GDPR or DPDP to build trust. As wearable tech continues to evolve, a balanced approach to innovation and privacy will be essential in fostering its responsible and beneficial use for all.

References

1. https://thehealthcaretechnologyreport.com/privacy-data-security-concerns-rise-as-healthcare-wearables-gain-popularity/ 
2. https://journals.plos.org/digitalhealth/article?id=10.1371/journal.pdig.0000104
3. https://www.marketsandmarkets.com/Market-Reports/wearable-electronics-market-983.html?gclid=Cj0KCQjwgMqSBhDCARIsAIIVN1V0sqrk6SpYSga3rcDtWcwh8npZ08L0_s4X91gh7yPAa6QmsctB-lMaAlpqEALw_wcB 
4. https://www.cambridge.org/core/journals/legal-information-management/article/health-data-on-the-go-navigating-privacy-concerns-with-wearable-technologies/05DAF11EFA807051362BB39260C4814C

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