CBDC: In a bid to increase transactions, the Reserve Bank of India (RBI) has extended invitations to a broader set of lenders to engage in pilot programs centered around the central bank digital currency, as reported by three bankers who spoke to local media.
A recent survey conducted by the Bank for International Settlements (BIS) and published on Monday revealed that nearly twenty central banks in emerging and advanced economies are anticipated to have digital currencies in circulation by the end of the decade.
Last year, the RBI commenced trials using Central Bank Digital Currency known as e-rupees in both the wholesale and retail markets.
Currently, prominent state-owned and private lenders such as State Bank of India (SBI.NS), Bank of Baroda (BOB.NS), ICICI Bank (ICBK.NS), HDFC Bank (HDBK.NS), Kotak Mahindra Bank (KTKM.NS), and Yes Bank (YESB.NS) are participating in the pilot project.
RBI Targets: One Million CBDC Transactions
The technology head of a state-owned bank, who attended a meeting with RBI officials on Tuesday, disclosed that the RBI has instructed smaller banks to either collaborate with fintech companies or enhance their systems to initiate CBDC pilots this year.
Due to their lack of authorization to speak to the media, the bankers opted to remain anonymous. RBI Deputy Governor T Rabi Sankar stated on Tuesday that the RBI aims to achieve a target of one million CBDC transactions per day by the end of this year.
As of June 2023, there were 1.3 million customers and 0.3 million merchants utilizing CBDC, according to Sankar. Another banker from a state-owned bank remarked,
“By involving more banks in the pilots, the RBI intends to identify any implementation issues and conduct trials on a substantial user base. We are in the advanced stage of submitting a CBDC pilot request to the RBI. We anticipate receiving approval within the next one to two months.”
In recent weeks, Shaktikanta Das, the governor of the RBI, highlighted that there was no urgency to implement the CBDC on a larger scale. He acknowledged the existence of technological and procedural obstacles and expressed the RBI’s intention to address these challenges before introducing the CBDC in a manner that ensures a smooth and non-disruptive transition.