Reserve Bank Working Towards Phased Implementation Of A Digital Currency; Likely To Conduct Pilot Tests In Near Future

Reserve Bank of India (RBI)'s Deputy Governor (Dy Gov) T Rabi Sankar on Thursday (22 July) said that the central bank is working toward a phased implementation strategy of a digital currency and that pilot tests for the same in wholesale and retail segments is a possibility in the near future, reports Economic Times.

Talking of the Central Bank Digital Currency (CBDC), Sankar said, "Every idea has to wait for its time. Perhaps the time for CBDC is nigh".

He added, "It would be RBI’s endeavour, as we move forward in the direction of India’s CBDC, to take the necessary steps which would reiterate the leadership position of India in payment systems."

Delivering a virtual keynote address at Vidhi Centre for Legal Policy, Sankar said that the RBI is presently framing several considerations on the scope and legal framework of the proposed CBDC. Once launched, the digital currency will coexist with the cash and other forms of digital payments in the country.

Sankar also said that the RBI defines CBDC as a legal tender issued by a central bank in a digital form. He said, "It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different."

It should be noted that Russia, China and the United Kingdom are among the other major economies globally that are evaluating their own digital currencies.