The RBI Expands CBDC Pilot Program
The Reserve Bank of India (RBI) has invited a broader range of lenders to participate in pilot programs involving the central bank digital currency (CBDC), aiming to increase the volume of transactions.
- Nearly two dozen central banks are projected to introduce digital currencies by the end of the decade.
- The RBI initiated trials of CBDCs, known as e-rupees, in wholesale and retail markets last year.
- Major state-owned and private lenders, including SBI, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Yes Bank, are participating in the pilot project.
- Smaller banks have been asked to form partnerships with fintech players or develop their own systems for CBDC pilots.
- The RBI aims to achieve one million CBDC transactions per day by the end of this year.
RBI Deputy Governor T Rabi Sankar announced that there were already 1.3 million customers and 0.3 million merchants actively using the CBDC by June 2023. Smaller banks have been instructed to seek feedback from current pilot participants.
Hot Take
The RBI’s expansion of the CBDC pilot program demonstrates the increasing interest and adoption of digital currencies by central banks worldwide. By involving a broader range of lenders, the RBI aims to enhance the volume of CBDC transactions. This move aligns with the global trend of central banks exploring the potential of digital currencies. As more central banks introduce their own digital currencies, it will be interesting to see how these initiatives impact the financial landscape and shape the future of transactions.
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