India Amasses 5 Million CBDC Users
India is continuing its exploration of a central bank digital currency (CBDC) but is not rushing to implement it, according to Shri Shaktikanta Das, the governor of the Reserve Bank of India (RBI).
Since the launch of digital rupee pilots in late 2022, India has reached 5 million retail CBDC users and onboarded 16 banks, Das reported during his inaugural address at the RBI Global Conference on digital public infrastructure and emerging technologies on August 26.
The RBI governor noted that India’s CBDC pilots cover both retail and wholesale segments, with the retail pilot initially focusing on payments.
India is currently testing the retail CBDC’s functionalities, including both online and offline modes, as well as programmability.
At the conference, Das stressed that India should not rush into launching a “system-wide CBDC” until it has thoroughly understood its potential effects on users, monetary policy, the financial system, and the broader economy.
“Such understanding would emerge from the generation of user data in pilots. The actual introduction of CBDC can be phased in gradually,” Das stated.
He expressed confidence that CBDC “undoubtedly” has the potential to “underpin the payment systems of the future,” both for domestic and cross-border transactions.
Das highlighted one example of CBDC’s programmability, which could ensure that funds reach the intended recipients.
He noted that “tenant farmers often find it difficult to access agricultural credit for inputs and raw materials as they do not have the land title to submit to the banks,” suggesting that CBDC could help establish farmers' identities and generate carbon credits.
Other features, such as anonymity and offline availability, are also proposed to be introduced gradually.
Das’s recent comments align with India’s original plan to cautiously proceed with CBDC testing.
This careful approach to CBDC implementation parallels India's cautious stance on cryptocurrencies like Bitcoin.
Although some local agencies have approved the return of major global crypto exchange Binance to India, other regulators have been hesitant to regulate crypto transactions.
In early August, Pankaj Chaudhary, the minister of state in India’s Ministry of Finance, stated that the Indian government has no immediate plans to regulate the sales and purchases of cryptocurrencies.
“Crypto assets or Virtual Digital Assets are unregulated in India, and the government does not collect data on these assets,” he stated.
Local reports indicate that India is currently preparing to revise its regulatory approach to digital assets, with the Department of Economic Affairs working on a key consultation paper on cryptocurrency legislation.
Sources:
https://cointelegraph.com/news/india-cbdc-pilot-5-million-users
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