In a major stride towards adoption of Central Bank Digital Currency (CBDC), the governor of Reserve Bank of India (RBI) Shaktikanta Das told CNBC that the central bank of India may launch its first digital currency trial programs by December.
Notably, central banks around the world are exploring digital currencies . For example, central banks in China, Europe and the UK are exploring digital currencies that would be issued by them, either to commercial lenders or to the public directly.
“We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally,” Das told CNBC.
"The RBI is studying various aspects of a digital currency including its security, impact on India’s financial sector as well as how it would affect monetary policy and currency in circulation," he added.
Das also highlighted that the RBI is examining the option of using a centralised ledger for the digital currency or the so-called distributed ledger technology (DLT).
The DLT, on which a majority of cryptocurrencies are based, allows multiple participants to access, share and record transactions simultaneously. While the centralised ledge would mean that the database is owned and operated by a single entity, in this case the RBI.
Last month, RBI Deputy Governor T Rabi Sankar said that the central bank was 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.
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."
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