Reserve Bank of India to start CBDC pilot in December

The Reserve Bank of India has announced its first digital currency trials may launch yet in December 2021. RBI governor said that central bank digital currency (CBDC) was being discussed for a while now, and the authorities remained cautious regarding its scale.

Speaking on Thursday, the central bank governor Shaktikanta Das told CNBC that the central bank was “being extremely careful” in its handling of a potential digital rupee, even as its counterparts around the world have been exploring their own sovereign digital currencies.

By his words, the RBI’s focus is on examining the potential impact of a digital rupee on India’s financial sector, with issues such a monetary policy control high on the agenda.

Regarding the technical side, Das also described that the central bank was weighing the merits of utilizing a centralized or decentralized ledger for its proposed CBDC.

For a likely timeline for the next stage of the project, Das noted, “I think by the end of the year, we should be able to … be in a position, perhaps, to start our first trials.”

These comments of the RBI governor are in keeping with recent remarks from other central bank officials in the country about the progress of the planned digital rupee project.

As Bloomberg reported, the deputy governor of the Reserve Bank of India (RBI) T Rabi Sankar stated in July that the RBI will introduce its own version of Central Bank Digital Currency (CBDC) in a phased manner and after carefully weighing its impact on various issues, including how it could hamper the deposit mobilization abilities of banks, and its potential effect on the conduct of the monetary policy. At the same time, among the more than 60 countries testing its own CBSCs, China continues to lead the way in the CBDC race with multiple pilot programs to incentivize the adoption of its e-yuan.