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RBI Likely To Conduct Trials For Digital Rupee By December

By FnF Correspondent | PUBLISHED: 27, Aug 2021, 19:14 pm IST | UPDATED: 01, Sep 2021, 12:13 pm IST

RBI Likely To Conduct Trials For Digital Rupee By December

New Delhi: In its attempt to implement digital currency, the Reserve Bank of India (RBI) has been working on a phased implementation strategy and the pilot may be expected by the end of this year. In an interview with CNBC, RBI Governor Shaktikanta Das said, “The Reserve Bank of India may launch its first digital currency trial programs by December."

While sharing the information, Das said, “We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally." China, Europe, and the UK are looking at digital currencies to be issued by them, either to commercial lenders or to the public directly.

Known as central bank digital currencies, or CBDC, it is a legal tender in digital form, and basically the online version of their respective fiat currencies. In case of India, it would be the digital rupee. The central bank is considering various aspects of digital currency including security, impact on the financial sector and its impact on monetary policy and currency in circulation.

Das added that the central bank is also considering having a centralized ledger for the digital currency or the so-called distributed ledger technology (DLT).

DLT is a digital database that allows multiple participants to access, share and record transactions simultaneously. On the other hand, a centralized ledger will mean that the database is owned and operated by a single entity — in this case, the central bank.

“I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,” Das told CNBC. His deputy, T Rabi Shankar, indicated last month saying the central bank was working toward a “phased implemental strategy” for a digital currency.

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