RBI working on phased implementation of CBDC
India's official digital currency likely to debut by early 2023
New Delhi: The Reserve Bank of India is in the process of implementing the Central Bank Digital Currency (CBDC) in a phased manner for the wholesale and retail segments, an official said on Wednesday.
The introduction of CBDC was announced in the Union Budget 2022-23, by Finance Minister Nirmala Sitharaman and necessary amendments to the relevant section of the RBI Act, 1934 has been made with the passage of the Finance Bill 2022, Ajay Kumar Choudhary, Executive Director (Fintech), Reserve Bank of India (RBI) said. The passage of the bill has enabled the RBI to conduct a pilot and subsequent issuance of CBDC, he said.
"RBI is also working on phased implementation of a central bank digital currency (CBDC) in both wholesale and retail segment," Choudhary said while delivering a keynote address at the 'PICUP Fintech Conference & Awards' by FICCI. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. India's official digital currency is likely to debut by early 2023, which will mirror any of the currently available private company-operated electronic wallets.
The CBDC will be a sovereign-backed digital currency. Touching upon the role of fintechs in the fast evolving digital payments space, the official said that the RBI has fostered innovation and it is keeping a close eye on the benefits and risks associated with innovative products and services offered by fintechs.