India’s central bank, the Reserve Bank of India (RBI), has
reportedly asked four banks to pilot the country’s central bank digital
currency (CBDC) ahead of its public launch.
RBI to Pilot India’s CBDC With Public-Sector Banks
The Reserve Bank of India (RBI), the country’s central bank, has
reportedly asked four public-sector banks to trial India’s central bank
digital currency (CBDC), Moneycontrol reported Monday, citing two
unnamed bank officials.
One of the officials was quoted as saying:
The RBI has asked State Bank of India, Punjab National
Bank, Union Bank of India, and Bank of Baroda to run the pilot
internally.
“There is a pilot on CBDCs,” another senior public-sector bank
official confirmed to the publication. “The RBI may come with the launch
this year. When it will exactly roll out the product and specifications
is to be seen.”
The Reserve Bank of India is also reportedly consulting with several
fintech companies on the digital rupee. Among them is the U.S.-based
firm FIS, which has been advising central banks on CBDC issues, such as
offline and programmable payments, financial inclusion, and cross-border
CBDC payments.
FIS senior director Julia Demidova told the news outlet last week:
FIS has had various engagements with the RBI … Our
connected ecosystem could be extended to the RBI to experiment with
various CBDC options.
“Whether it is a wholesale or retail CBDC transaction, our technology
can also be extended to commercial banks where they can test and
tokenize central bank money in the form of digital regulated money,” she
added.
India’s finance minister, Nirmala Sitharaman, announced
while presenting the federal budget 2022 in February that the RBI will
issue a CBDC in this financial year. In May, the central bank said that
it will adopt a “graded approach” to launching the digital rupee.
“The digital rupee will be the digital form of our physical rupee and
will be regulated by the RBI. This will be such a system that will
enable an exchange of physical currency with digital currency,” Indian
Prime Minister Narendra Modi previously explained.
Meanwhile, the RBI is advocating for a ban on all cryptocurrencies
such as bitcoin and ether. RBI Deputy Governor T. Rabi Sankar said
earlier this year that cryptocurrencies have “no underlying cash flows”
and “no intrinsic value,” adding that “they are akin to Ponzi schemes,
and may even be worse.” The central banker stressed, “Banning
cryptocurrency is perhaps the most advisable choice open to India.”
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