India is testing a digital rupee (CBDC) with 5 million users and 16 participating banks, but has yet to officially roll it out due to concerns about the impact.
Reserve Bank of India (RBI) Governor Shri Shaktikanta Das has said that India is conducting a cautious trial of CBDC, focusing on studying its impact before formally implementing it.
Speaking at the RBI Global Conference on Digital Infrastructure and Emerging Technologies on August 26, Das said the pilot programme has attracted 5 million users and participation from 16 banks.
The pilot program covers both retail and wholesale segments, focusing on online and offline payment use cases, as well as CBDC programmability.
Despite the positive initial results, Governor Das stressed the importance of comprehensively assessing the impact of CBDC on users, monetary policy, the financial system and the economy before widespread deployment.
“The formal rollout of CBDC can be done gradually,” said Das, adding that collecting user data from the pilot program will be a key factor in the process. He believes that CBDC has the potential to support future payment systems, both domestically and internationally.
Reserve Bank of India Governor Shri Shaktikanta Das at the Global Conference on DPI and Emerging Technologies. Source: YouTube Potential for Widespread Application of CBDC
One of the potential benefits of CBDC mentioned by Governor Das is programmability, which would allow for ensuring financial transfers reach the right target audience.
He cited the example of farmers who rent land, which often has difficulty accessing credit due to a lack of collateral. CBDC could help verify identity and generate carbon credits, opening up access to credit for this group.
Mr. Das also mentioned that features like anonymity and offline usability will be rolled out in phases. This cautious approach is similar to India's stance on cryptocurrencies like Bitcoin.
Although some domestic agencies support the return of cryptocurrency exchange Binance, the government has no plans to regulate cryptocurrency trading.
In early August, Indian Finance Minister Pankaj Chaudhary stated that the Indian government currently has no plans to regulate the trading of cryptocurrencies. According to Pankaj Chaudhary: “Crypto-assets or Digital Assets are not regulated in India, and the government does not collect data on these assets.”
According to local reports, India is now preparing to revise its regulatory approach to digital assets as the Ministry of Economic Affairs prepares a crucial consultation paper on cryptocurrency legislation.