On Tuesday, India’s central bank launched a pilot program for its virtual currency, allowing a select group of banks to settle secondary-market trades in government securities.
Data from Clearing Corp. of India Ltd. shows that 7.38% of the 2027 debt and 7.26% of the 2032 bonds were among the first to be traded using the new form of money. Nine banks are taking part in the trial. Within a month, the Reserve Bank of India plans to test the e-rupee for retail use in a few key locations.
India’s CBDC rollout comes a day after Singapore
A day after Singapore’s monetary authority announced trials of a digital version of its local dollar, the limited roll-out was announced.
The central banks of China, the euro area, the Bahamas, and other nations have been experimenting in this area while numerous others are searching for ways to deal with the threat that private digital currencies portray to financial stability.
The RBI previously stated in a concept note that it “will provide the users the same experience of dealing in currency in digital form, without any risks associated with private cryptocurrencies.”
While offering the advantages of virtual currencies, central bank digital currencies will also guarantee consumer protection “by avoiding the detrimental social and economic consequences of private virtual currencies.”
Among the banks participating in the pilot are the Union Bank of India, HDFC Bank, ICICI Bank Ltd., Kotak Mahindra Bank, Yes Bank, IDFC First Bank, State Bank of India, Bank of Baroda, and the Indian division of HSBC Holdings Plc.
India has long been formulating its CBDC plans. The nation’s feelings toward cryptocurrencies are mixed. A complete ban on digital assets is what the Reserve Bank of India wants. On the other hand, the country levies a 30% tax and 1% TDS on cryptocurrencies.
Blockchain technology has been warmly welcomed and adopted by a number of government agencies, despite the fact that the country is not particularly accepting of cryptocurrencies. After years of study, the RBI released a CBDC concept on October 7, 2022.
Now that the country has rolled out its CBDC pilot, its stance on crypto is envisioned to be changed in the near future.
