Reserve Bank of India CBDC Pilot
Reserve Bank of India will launch the retail central bank-backed digital currency (CBDC) pilot next month. It will be interoperable with existing payment systems.
On 1 November, RBI debuted the wholesale segment pilot for the digital rupee. According to the RBI, the digital rupee will increase market efficiency by lowering settlement transaction costs.
The settlement of secondary market transactions involving government securities has been the primary use case of the Reserve Bank of India CBDC.
Reserve Bank of India CBDC to debut
According to the Economic Times of India, the RBI is reportedly finalising plans to launch the retail digital rupee pilot. The participating banks are the State Bank of India, HDFC, Union Bank of India, Bank of Baroda, ICICI, Kotak Mahindra, Yes, and IDFC First Bank.
The report stated that the pilot would include all commercial banks currently operating in the country and that the National Payments Corporation of India would host the CBDC platform. It will be similar to the instant real-time payment system formed by NPCI, the unified payments interface (UPI) system.
According to the report, the digital rupee is not intended to replace existing widely used payment systems, but to supplement them. The retail CBCD will be compatible with other payment systems and function similarly to UPI.
Each participating bank will test the CBDC on 10,000 to 50,000 users. The banks will work with the PayNearby and Bankit platforms to implement the new payment option, and the NPCI will be in charge of the CBDC infrastructure.
Customers and merchants will both need to download the CBDC-specific wallets. The retail CBDC of India will initially be offered as a stand-alone product, with the final version integrating with existing mobile and internet banking services.
Plans to launch the CBDC were revealed in February 2022 by Indian Finance Minister Nirmala Sitharaman, who claimed that a digital rupee would give India's economy a "big boost". The Reserve Bank of India then suggested a three-step graded rollout strategy, aiming for little or no disruption to the traditional economic system
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.