In an interview with CNBC, the Reserve Bank of India’s governor Shaktikanta Das revealed that India could begin its digital rupee trial by the end of the current year. Central banks, including those in China, Europe, and the U.K., are exploring digital currencies that they would issue, either to commercial lenders or to the public directly.
RBI is considering a CBDC.
Central Bank Digital Currencies are legal tender in digital form and are essentially the online version of their respective fiat currencies. In India’s case, that would be the digital rupee. “We are extremely careful about it because it’s completely a new product, not just for RBI, but globally,” Das revealed in the interview. Das further unveiled that the RBI is studying various aspects of a digital currency, including its security, impact on India’s financial sector, and how it would affect monetary policy and currency in circulation. Das added that the RBI is also exploring the choice between having a centralized ledger or the DLT for the digital currency.
RBI could start a CBDC trial by the end of this year.
A centralized ledger would mean that the database is owned and operated by a single entity — in this case, the central bank. “I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,” Das told CNBC. Last month, his deputy, T Rabi Shankar, said the central bank was working toward a “phased implemental strategy” for a digital currency. Currently, crypto regulations are in India are still in a grey area.