The potential of digital rupee: RBI Governor supports CBDC

RBI Governor Supports Central Bank Digital Currency

The Governor of the Reserve Bank of India, Shaktikanta Das, emphasized India’s potential to facilitate efficient cross-border international payments by utilizing a central bank digital currency (CBDC). Das expressed his support for CBDC to streamline international money transfers, aiming to reduce the time and costs involved in such transactions.

Payment System Development in India

India operates a real-time gross settlement system 24/7 and is considering extending this system to settlements in global currencies such as the US dollar, euro, and British pound. As part of trial activities, India is evaluating the programmability and interoperability of its CBDC through pilot programs, integrating it with existing infrastructure, including the Unified Payments Interface.

Stability of CBDC versus Cryptocurrencies

Shaktikanta Das expressed doubts about cryptocurrencies, emphasizing the benefits of stability and control provided by CBDC compared to the volatility of cryptocurrencies like Bitcoin and Ethereum. The RBI remains cautious about cryptocurrencies, fearing potential threats to the country’s economic stability.

Introduction of Digital Rupee and Its Acceptance

India launched a pilot program for the digital rupee in December 2022, but initially, the pace of adoption was slow, reaching a million retail transactions by June 2023. Nonetheless, the Indian CBDC platform surpassed 5 million users in August 2023. Das advocates for a gradual implementation of the digital currency, highlighting the need to understand its impact on users and the entire financial system.