Coinspeaker India Advances Digital Payment Systems and CBDC Adoption, No Rush for Public Rollout
India is advancing its mobile payment systems and cross-border payment links with several countries. According to Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar, India already has an arrangement with Sri Lanka and is working on a similar partnership with the UAE and other nearby countries. He further mentioned that the South Asian country has forged agreements with Bhutan and Nepal. He said:
“We have one arrangement with Sri Lanka. We are working out with other countries like UAE and some neighboring countries as well.”
The RBI is determined to create an easy digital payment system for people in India. It has also teamed up with other central banks in Asia to create a platform for cross-border payments. This platform will allow payments to be confirmed right away. With this partnership, payments between countries could become faster and easier, further boosting trade and remittances.
India’s digital currency, called the e-rupee, was launched in 2022. It is a digital version of the country’s regular money. The South Asian nation is one of the few countries to have its own digital currency, but it is still being tested. The central bank discovered that the adoption rate of the e-rupee has been slow, as it had only reached 1 million retail transactions by the middle of this year.
The RBI is also testing different parts of the digital currency, like security, and looking into how it might affect bank deposits and money management.
RBI’s Cautious Approach to Central Bank Digital Currency
RBI Deputy Governor Michael Debabrata Patra raised concerns about how CBDCs might affect the banking system’s stability. He noted that when financial crises hit, people might view CBDCs as safer than traditional bank deposits and shift their funds into them. This could weaken banks by reducing their deposits. He also mentioned that the effects of CBDCs on key systems like bank deposits and deposit insurance are still uncertain, adding to the complexity of implementing them.
However, based on a Bloomberg report, the RBI perceives CBDCs as the future currency and an economical approach for cross-border payments, commercial transactions, and overseas remittances. Governor Shaktikanta Das has also proposed technical support to countries seeking common international standards for cross-border payments.
Deputy Governor Sankar has made it clear that the country is in no rush to make its digital currency available to the wider public. He maintained that once they have a clearer picture of what the outcome of the CBDC will be, then they will make it public. Thus, as of now, there is no date on the calendar for it.
“We are in no hurry to roll it out immediately, once we have some visibility of what the outcome or impact will be, we’ll roll it out. We don’t keep a specific timeline for that,” he claimed.
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India Advances Digital Payment Systems and CBDC Adoption, No Rush for Public Rollout
