As numerous governments embrace the concept of central bank digital currencies [CBDCs], India is also actively participating in this particular trend. The country has been making notable progress in the field of CBDCs. More recently, the Reserve Bank of India [RBI] has encouraged a significant number of lenders to participate in pilot programs involving the digital rupee.
The bankers preferred to remain anonymous due to their lack of authorization to speak with the media. A technology head from a state-owned bank participated in a meeting with officials from the RBI and shared,
“The RBI has asked smaller banks to either tie up with fintech players or develop their systems to start CBDC pilots this year. We will now have to float tenders to get interested fintech partners on board and evaluate the costs involved. This process is expected to take about four-five months.”
It is important to mention that the RBI initiated trials involving CBDC in both the wholesale and retail markets. This was done last year and was called e-rupees. Notably, several prominent state-owned and private lenders, including State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Yes Bank, are currently participating in this pilot project.
Also Read: 93% of Banks Working on CBDCs: India, EU, UK, Intently Exploring
Assessing the progress of India’s Digital Rupee
As of June 2023, there were reportedly 1.3 million customers and 0.3 million merchants to have utilized the CBDC. RBI Deputy Governor, T Rabi Sankar said that the bank has a set of objectives. They intend to achieve one million CBDC transactions per day by the end of 2023. Another participant of the meeting said,
“By getting more banks to participate in the pilots, the RBI wants to see if there are any glitches in implementation and conduct pilots on a large user base. We are in the advanced stage of submitting a CBDC pilot request to the RBI. We expect the approval to come in the next one-two months.”
However, several users have been taking to Twitter to complain about the digital rupee services offered by their respective banks.
India’s recent actions align with the global trend of rapid development of CBDC. According to a recent survey by the Bank for International Settlements [BIS], it is projected that 24 CBDCs will be launched by 2030. The survey further indicated that over 93% of banks worldwide are actively exploring CBDCs. Furthermore, by 2030, it is anticipated that more than 15 retail CBDCs will make a debut. Alongside, nine wholesale CBDCs will be operational and in circulation.