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.
An official was quoted saying that:
RBI asked the State Bank of India and Punjab National Bank to manage the pilot internal.
“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 consulting on the digital rupee with several fintech businesses. FIS from the U.S. is one of them. FIS has been providing advice to central banks about CBDC matters, including offline and programmable payment, financial inclusion, cross-border CBDC payments and financial inclusion.
Julia Demidova, senior FIS director, 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.
The RBI advocates for an end to all cryptocurrency, including 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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