The RBI suggests backing the distribution of CBDC through non-bank payment operators.
Non-bank payment operators may soon facilitate the sending and receiving of the RBI’s CBDC, also known as the digital rupee.
Several nations, including India, are expanding trials of central bank digital currencies (CBDCs) in hopes of integrating them into their existing financial systems. The Reserve Bank of India (RBI) has suggested broadening support for the digital rupee CBDC within the retail ecosystem beyond just banks. It is anticipated that the RBI will soon begin circulating the digital rupee through payment system operators not affiliated with the banking system. This information was disclosed on Friday in a statement by RBI Chief General Manager Yogesh Dayal.
Previously, India’s CBDC distribution was solely conducted by banks involved in its trials. However, going forward, the RBI is expected to permit platforms like Google Pay and PhonePe to also distribute the digital rupee within the retail ecosystem.
“Increasing CBDC pilots in both retail and wholesale segments are ongoing, with more use cases and participating banks. In line with this approach, there is a proposal to extend CBDC-retail accessibility to a wider user segment in a sustained manner by allowing non-bank payment system operators to offer CBDC wallets,” Dayal stated in a prepared statement issued by the RBI.
CBDCs serve as a digital representation of a country’s fiat currency, operating on blockchain networks similar to cryptocurrencies but issued by a central bank. With CBDCs, individuals can swiftly process large payments, and all transaction histories are stored permanently and immutably.
“This is anticipated to improve accessibility and broaden options for users, while also testing the resilience of the CBDC platform to handle multi-channel transactions. Necessary adjustments will be implemented to facilitate this,” the official stated in the announcement.
Since December 2022, the RBI has made significant progress in conducting research and development on the digital rupee. The CBDC is currently undergoing advanced trials in India.
In February of this year, the RBI discussed its intentions to explore offline solutions to promote the adoption of CBDC in regions of India with limited internet connectivity, unlike more developed cities.
In 2023, the State Bank of India launched UPI interoperability with the digital rupee, while Canara Bank introduced a comparable service.
“In response to an RTI appeal, the RBI disclosed in February that as of March 31, 2023, e-Rupee issued for CBDC (Retail) amounted to Rs. 5.70 crore, as per data published in the Reserve Bank of India’s balance sheet,” the statement read.
