The Reserve Bank of India (RBI) announced on December 1 that it will start piloting a central bank digital currency (CBDC). The testing phase that will begin for the digital rupee will consist of the issuance, distribution and individual use of the digital asset. In a statement made by the RBI, it was reported that the digital rupee will be designed to be the country’s fiat currency in the future.
As part of the pilot, RBI informed that the digital rupee trials will take place with a closed group of selected retail customers and businesses. The pilot will also test the stability of the rupee issuance, distribution, and individual usage process in real time. In the details shared by RBI about the digital rupee test study, it was stated that users will make e-rupee transactions through digital wallets offered by selected banks.
The first phase of the pilot will begin with trials from the Reserve Bank of India, ICICI Bank, Yes Bank and IDC First Bank in four cities across the country. In the second phase study, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will be included in the pilot study. RBI also stated that more banks, users and regions can be included in the digital rupee project, if necessary, depending on the operation of the test studies.
The Reserve Bank of India, like many other countries, has a strict stance towards cryptocurrencies. Although Indian legislators made moves towards crypto money regulations this year, they could not reach a consensus on this issue, and finally, it was decided to wait for regulations at the global level. On the other hand, in response to the increasing interest in crypto money in India every year, the authorities have accelerated their work to create a digital payment system under their control.