Reserve Bank of India Governor Shaktikanta Das has called for a cautious rollout of CBDC as the retail pilot now reaches over 5 million users.
India’s central bank’s digital currency platform has surpassed the 5 million user mark as the country continues to cautiously expand its digital currency pilot program, according to a report by Business Standard.
At a conference in Bengaluru on Monday, August 26, Reserve Bank of India Governor Shaktikanta Das stressed the need for a measured approach to the large-scale rollout of the country’s CBDC, also known as e-rupee, emphasizing the importance of understanding its impact on users, monetary policy and the broader financial system. Das stressed that comprehensive insights from pilot data are essential before proceeding with a broader implementation.
“The actual introduction of CBDCs can be gradual. There is no doubt that CBDCs have the potential to support the payment systems of the future, both for domestic and cross-border payments.”
Shaktikanta Das, Governor of the Reserve Bank of India
Launched in December 2022, the RBI’s CBDC pilot covers both retail and wholesale segments. The pilot, which currently involves 16 participating banks, has expanded beyond the initial payment use cases to test offline and programmability features. Das highlighted that the programmability feature could play a pivotal role, saying it could serve as a “key enabler for financial inclusion by ensuring delivery of funds to the targeted user.”
Adoption of the e-rupee has been slow, with the Reserve Bank of India reporting 1 million retail transactions by the end of June, a milestone reached only after local banks introduced incentives and partially paid employee salaries using the state-issued digital currency.
The RBI had earlier urged banks to increase the number of transactions to at least 1 million per day by the end of 2023 to test the scalability of the system. However, this initiative has since stopped, casting doubt on the future of the digital currency initiative due to the gap between incentives and actual user adoption.
