Innovative digital rupee: India tests unique CBDC features
India Intensifies Testing of Innovative Features in Digital Rupee
India, one of the countries consistently exploring the potential of central bank digital currencies (CBDCs), is expanding the pilot of its programmable digital rupee with unique capabilities. This initiative will not only facilitate peer-to-peer payments but also introduce innovative solutions such as offline payments.
A Modern Approach to Digital Currency
Since the beginning of last year, India has been testing a retail version of its CBDC aimed at enabling fast and convenient money transfers. The new digital currency is receiving positive feedback, recently reaching an impressive number of millions of transactions per day. The Reserve Bank of India (RBI) plans to introduce transaction programmability, opening up new possibilities for users.
Support for Education and Areas with Limited Internet Access
RBI highlights potential benefits associated with the programmability of the digital rupee, mentioning a case where funds were allocated to a student for purchasing textbooks. Additionally, the central bank intends to test offline functionality, which is crucial for areas with limited internet access, including mountainous regions.
Development of CBDC on the International Stage
India is joining the ranks of countries experimenting with central bank digital currencies for over a decade. However, the leaders in CBDC development seem to be the Chinese, who are consistently advancing their solutions in this field. Forecasts suggest that by 2024, many other countries will announce significant updates to their CBDC-related projects. The question remains, though, whether such state-backed digital currencies will bring tangible benefits to consumers and businesses.
Comparison with Cryptocurrencies
CBDCs, inspired in part by the popularity of Bitcoin and other cryptocurrencies, differ from the latter mainly in terms of control and decision-making. Cryptocurrencies offer their users greater autonomy, enabling transactions without the need for central authority approval. It is worth noting that both types of digital currencies have potential but differ in their approach to decentralization.
