Central Bank Digital Currency in India: Development and Future Prospects.
Central Bank Digital Currency in India: Current Data and Development Steps
Central Bank Digital Currency (CBDC) is becoming increasingly popular in India, and the latest data shared by the Governor of the Reserve Bank of India, T Rabi Sankara, sheds light on the development of this digital currency.
Decline in CBDC Transaction Volume
By the end of December 2023, the volume of Central Bank Digital Currency transactions decreased after exceeding 1 million. Sankara noted that despite this decline, the overall number of transactions since the CBDC pilot launch on December 1, 2022, stands at an impressive 22 million transactions. Interestingly, the pilot involved up to 5 million users.
Utilization of Digital Rupee by Banks
In December, banks started disbursing employee benefits using the digital rupee, helping the Reserve Bank of India achieve its target of 1 million daily transactions. Currently, 4.6 million users and 400,000 merchants are actively participating in CBDC, with the increasing acceptance of the digital currency contributing to the growth of person-to-merchant (P2M) transactions.
CBDC Programmability and New Use Cases
Recently, the programmability feature of CBDC was launched, opening up new possibilities. One use case was the direct transfer of funds to a farmer for the purchase of essential agricultural materials. Moreover, an internal test group in the bank is working on new use cases that will soon be made available to the public.
Planned Rollout of Retail CBDC Wallets
RBI Governor Shaktikanta Das has proposed broader availability of retail CBDC wallets, enabling non-banking sector entities to utilize this modern form of payment. This step will not only facilitate testing the CBDC platform for multi-channel transactions but also accelerate the adoption of digital currency in society.
The introduction of Central Bank Digital Currency in India marks a step forward in the digitization of the financial system, opening up new perspectives for fast and secure transactions for millions of users.
