Rabi Sankar, the Deputy Governor of the Reserve Bank of India, recently announced at a policy press conference that the central bank’s digital currency pilot project is underway with 50,000 users and 5,000 merchants participating. The project, which is being conducted in five cities with eight banks, has processed 7.7 lakh worth of transactions.
Slow and Steady Approach
RBI is taking a gradual and cautious approach to the pilot project to avoid any unintended consequences. The central bank intends to expand the project gradually, with targets for users and merchants in place. Additionally, five more banks are set to join the project soon.
The Reserve Bank of India is a strong supporter of Central Bank Digital Currencies (CBDCs) and sees them as “the future of money.” The pilot project is aimed at reducing the country’s reliance on cash, enabling smoother and cheaper international settlements, and protecting citizens from the volatility of private cryptocurrencies. In the next phase of the project, the central bank plans to test CBDCs for wholesale transactions and cross-border payments.
Read More: Chinese Blockchain Project Creates a SWIFT-Like System With Stablecoins and CBDCs.
Retail Giants Join In
Reliance Retail, India’s largest retailer, announced last week that it plans to accept payments in the digital rupee. The retail chain has teamed up with ICICI Bank, Kotak Mahindra Bank, and fintech Innoviti Technologies to support the digital rupee in its Freshpik stores across the country. This move is expected to drive adoption of CBDCs in India.
While the RBI supports CBDCs, the central bank has a harsh stance on cryptocurrencies, arguing that they have no underlying value and are prone to fraud and scams. The governor of RBI, Shaktikanta Das, recently stated that cryptocurrencies do not have any intrinsic value and compared their perceived value to the tulip mania bubble of the early 20th century.
