Indian central bank RBI is hinting that it might start a central bank digital currency (CBDC) pilot program in 2022.
According to a report by local media on Thursday, November 18, a senior bank official, on Wednesday, said that the Reserve Bank of India (RBI) may launch a CBDC pilot in the Q1 of the next fiscal year, from April 2022 to March 2023.
Vasudevan, chief general manager at the Department of Payment & Settlement of the RBI, at the State Bank of India’s Banking and Economic Conclave on Wednesday, said the work on a CBDC was going on and the bank was looking at various mechanisms related to the CBDC.
When asked how soon India could have its CBDC, Mr. Vasudevan said that a pilot could be launched by the first quarter of the next fiscal year. “So, we are bullish on that,” he said.
According to him, a CBDC is not a simple digital version of national currency. Therefore, the bank is very cautious in its approach and looking into various issues, and nuances related to CBDC like distribution, validation mechanisms, and potential targets to “see whether it should be as a wholesale segment or target the retail segment, and for what purpose as well.”
Vasudevan further said that they were checking if intermediaries could be bypassed altogether and whether the underlying technology would be decentralized or semi-decentralized.
Seeing the explosive growth of crypto assets like in the last two or so years, their ease in payments and the necessity of a better payment system brought forward by the COVID-19 pandemic, central banks around the world are looking for efficient systems. CBDC is the answer and nine out of 10 banks are now involved in some kind of CBDC project.
China is currently leading the race with its Digital Yuan. According to some reports, Digital Yuan has been used to conduct 62 billion yuan, approximately $9.7 billion, of transactions as of the end of October. Digital Yuan is now being integrated with various industries. According to a recent report by Global Times, Xiamen Airlines sold its first ticket paid by Digital Yuan on Tuesday, November 16.
However, the recent reports suggest that the bill’s language has been changed a little bit to accommodate cryptocurrencies as a legal asset in the country’s law.
According to the reports, the bill may not treat crypto assets currency to settle transactions and make payments but could be held as an asset like shares, gold, or bonds.