KALP’s CBDC Project for BIMTECH: Revolutionizing Campus Transactions

KALP has undertaken an ambitious project in collaboration with BIMTECH, creating a digital currency ecosystem for the college. This project is based on Central Bank Digital Currencies (CBDCs) and aims to simplify and enhance how transactions are conducted on campus. By creating the BIMTECH CBDC coin, KALP is providing students, vendors, and administrators with a secure and efficient method to handle payments, leveraging the latest in digital currency technology. This blog will explore how CBDCs are useful for students, their challenges, and how the system is structured with three main stakeholders: admin, vendors, and students.

Problem Statement: Why CBDCs for Students?

College life can be hectic, especially when it comes to managing day-to-day transactions. Students often face challenges such as limited access to traditional banking services, delays in processing payments, and cumbersome cash-based systems. In a campus environment, where students need to make frequent payments for food, stationery, or other supplies, an efficient digital solution can make life much easier.

The current payment systems in most campuses rely on physical cash, debit/credit cards, or mobile wallets, all of which have their limitations. Cash requires carrying change, cards come with processing fees, and mobile wallets still require bank integration. Moreover, students often have limited financial literacy and may struggle with managing their finances efficiently.

CBDCs provide a perfect solution for these issues. A digital currency specific to the campus can eliminate the need for physical cash and streamline the process of transferring money between students, vendors, and the college administration. It allows for secure, instant payments with low fees and gives the college greater control over the financial ecosystem.

The BIMTECH CBDC: A New Way to Transact

The BIMTECH CBDC-like currency is the digital coin created specifically for the campus, enabling a frictionless experience for students and vendors alike. The CBDC-like currency is managed by KALP’s digital infrastructure, ensuring that every transaction is traceable, secure, and efficient. This coin is used for all on-campus purchases, making it easy for students to pay for food, supplies, and other essentials without the need for cash or card transactions.

The innovative approach of BIMTECH’s CBDC-like currency brings a powerful feature to the table: the programmability of money, something that simply is not possible in traditional finance. In conventional systems, once money is transferred, it can be used freely, often without any control over where or how it is spent. However, with programmable digital currencies like BIMTECH’s, specific rules and conditions can be embedded directly into the currency itself. This allows the administration to control its use within the ecosystem, ensuring that funds are allocated precisely for their intended purposes, such as tuition fees, on-campus purchases, or transactions with approved vendors. It introduces a higher level of precision and transparency that traditional finance cannot achieve.

Another important aspect of this currency is the way it limits usage within the BIMTECH institution, creating a secure, closed-loop system. Since the currency can only be spent inside the institution’s ecosystem, it effectively prevents misuse or involvement in illegal activities outside of campus. Unlike conventional money, which can be transferred or laundered elsewhere, BIMTECH’s currency is restricted to approved vendors and services on campus, ensuring that all transactions remain traceable and accountable.

The Stakeholders and Their Roles

The BIMTECH CBDC-like currency system is built around three main stakeholders: admin, vendors, and students. Each has a specific role in ensuring the smooth functioning of this digital economy.

1. Admin (The RBI of the Campus)

The admin acts as the equivalent of the Reserve Bank of India (RBI) in this system. Their role is to oversee the entire CBDC ecosystem, including minting new coins, burning unused or misused coins, blacklisting, whitelisting, and distributing the tokens across the campus.

• Minting: The admin controls the creation of new BIMTECH CBDCs-like currency, ensuring that the right amount of currency is in circulation to meet the needs of the campus without oversupply.
• Burning: When students leave the college or if tokens are misused, the admin has the authority to burn the CBDCs. This process starts by putting the student’s account on hold and then permanently removing their coins from circulation.
• Whitelisting and Blacklisting: Admins are also responsible for whitelisting students and vendors, allowing them to participate in the digital currency system. Blacklisting occurs when students misuse their tokens or leave the college. Misuse could include fraud, unauthorized transactions, or violation of the college’s code of conduct.
• Distribution: Once users are whitelisted, the admin is responsible for distributing the appropriate amount of CBDCs to students and vendors. This could be part of a student’s monthly stipend or funds allocated for specific purposes, such as scholarships or subsidies.

2. Vendors

On the receiving end of the BIMTECH CBDC-like currency system are the vendors who operate on campus. Vendors include canteens, bookstores, and other service providers. Their role is simple: accept CBDCs from students as payment for goods and services.

By using the CBDC system, vendors can process payments instantly without the hassle of dealing with cash or traditional banking systems. This reduces the overhead costs associated with handling cash or card payments, allowing for more efficient business operations.

3. Students

Students are the primary users of the BIMTECH CBDC-like currency. They use the digital tokens to make purchases, paying for everything from meals in the canteen to study materials at the bookstore. The CBDC system is designed to be user-friendly, with simple interfaces that allow students to check their balances, view transaction histories, and make payments with a few clicks.

For students, the CBDC system offers numerous benefits:

• Instant Payments: No more waiting for transactions to clear or dealing with change. Payments are made in real-time.
• Addresses a key issue for international students: Many foreign students at BIMTECH do not have Indian bank accounts or access to popular Indian fintech apps like Paytm or Phone Pe, making financial transactions on campus difficult.
• Removes the need for local banking complexities: International students can now engage in campus-related financial activities without the hassle of setting up Indian bank accounts or understanding local fintech platforms.
• Budget Management: Students can track their spending through the app, helping them manage their budgets more effectively.
• Security: With every transaction recorded and traceable, students are protected from fraud and theft.

Through these key innovations, the BIMTECH CBDC-like currency not only addresses current challenges but also represents a forward-thinking approach to institutional finance. It blends security, convenience, and innovation in a way that traditional finance struggles to replicate.

Progress So Far

Despite these challenges, the test run of this CBDC-like currency was a resounding success. More than 1,300 transactions were completed in the development phase, demonstrating the currency’s functionality and potential. This test highlighted how seamlessly students, vendors, and administrators could engage in transactions, providing a safe and efficient financial ecosystem.

As the project continues to evolve, KALP is committed to addressing any issues and ensuring that the BIMTECH CBDC-like currency remains a valuable tool for students and vendors.

Looking Ahead

KALP’s CBDC project for BIMTECH is a forward-thinking initiative that has the potential to transform how students and vendors conduct transactions on campus. By creating a digital currency tailored to the needs of the college, KALP is solving real-world problems like payment inefficiencies, while also providing a modern, secure, and transparent system for managing campus finances. With more than 1,300 successful transactions in the testing phase, the project is well on its way to redefining the financial ecosystem of the campus.