RBI may launch digital currency pilot by Q1 next year

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Mumbai : The Reserve Bank of India (RBI) may conduct a pilot trial of its central bank digital currency (CBDC) in the first quarter of the next financial year.

“We are on the job and looking into the various issues and nuances related to CBDC. It is not an easy thing to say that CBDC can be a habit from tomorrow on,” said P Vasudevan, Chief General Manager, Payment and Settlement Department, RBI at a banking event here on Wednesday, November 18.

“The banking system has been taking the lead in terms of currency distribution as a tiered model, whether the same model should be accepted for CBDC as well, we will have to see,” Vasudevan said.

The term central bank digital currency (CBDC) refers to the virtual form of a fiat currency. A CBDC is an electronic record or digital token of a country’s official currency. As such, it is issued and regulated by the country’s monetary authority or central bank.

According to industry experts, as now being examined by RBI for retail and international trade payments, CBDC could have a huge impact on the financial ecosystem. Apart from building a cashless economy, it will play an important task in promoting grassroots-level financial inclusivity and modernizing the banking sector.

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