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 operate 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 test India’s central bank digital currency (CBDC), Moneycontrol reported on Monday, citing two unidentified bank officials. Told.
One of the officials was quoted as saying:
RBI has asked State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda to conduct the pilot internally.
“There is a pilot on CBDC,” another senior public sector bank official confirmed to the publication. “RBI may come up with a launch this year. When it will properly introduce the product and specifications remains to be seen. ,
The Reserve Bank of India is also reportedly in consultation with several fintech companies on the digital rupee. Among them is US-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 multiple ties with RBI… Our connected ecosystem can be extended to RBI to experiment with various CBDC options.
“Whether it is wholesale or retail CBDC transactions, our technology can also be extended to commercial banks where they can test and tokenize central bank money as digital regulated money,” she said.
India’s Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2022 in February, announced that the RBI would issue CBDCs in this financial year. In May, the central bank said it would adopt a “graded approach” to launch the digital rupee.
“Digital Rupee will be the digital form of our physical rupee and will be regulated by RBI. It will be a system that will enable the exchange of physical currency with digital currency,” Indian Prime Minister Narendra Modi explained earlier.
Meanwhile, the RBI is advocating for a ban on all cryptocurrencies like bitcoin and ether. RBI Deputy Governor T. Rabi Shankar said earlier this year that cryptocurrencies have “no underlying cash flow” and “no intrinsic value,” adding that “they are similar to Ponzi schemes, and could be worse. ” “Banning cryptocurrency is probably the most appropriate option for India,” the central banker insisted.
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