India in Test Phase for Digital Currency

According to the latest research, 105 countries around the world are working on their central bank digital currency (CBDC). Among these countries, China is the leading country in the field of CBDC, starting the nationwide adoption of the digital yuan. However, the US has not yet made a clear decision on a digital dollar. So much so that US senators are still not convinced that the digital form of the dollar can be useful. On the other hand, the Reserve Bank of India (RBI) also announced that as of November 1, the pilot program for the central bank digital currency has begun.

The Reserve Bank of India announced that the digital currency will be used in the secondary market transactions of government bonds in the pilot program to be continued with the participation of 9 banks. In this way, the bank aims to reduce transaction costs. In addition, RBI announced that individual usage tests of the e-rupee will take place in the specified regions in the coming days. The banks that will participate in the pilot program are State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

It was announced that the digital rupee, which was initially planned to be used to facilitate interbank transactions and reduce transaction costs, is planned to be used in wholesale transactions and cross-border payments in the coming periods. Prior to this development, the RBI had published a report detailing the advantages and disadvantages of the central bank digital currency. Following this report, it seems that RBI has taken an important step towards the digital rupee.

India, which has made efforts to regulate cryptocurrencies in the country in the past months, has not made any progress in this regard due to the failure of government agencies to reach consensus. Like other country central banks, the RBI maintains its negative attitude towards cryptocurrencies. At this point, it is seen that India, which wants to benefit from this system under its own control by issuing a central digital currency, has accelerated its digital currency studies.