Reserve Bank of India is all set to expand its central bank digital currency (CBDC) trials. The central bank is now hoping to integrate its digital currency with existing financial systems. As per the information shared by the central bank, it has been proposed to expand the support for CBDC within the retail ecosystem beyond banks. Soon, the RBI is likely to start circulating CBDC through payment system operators who are not part of the banking system.
“CBDC pilots in the Retail and Wholesale segments are underway with more use cases and more participating banks. Continuing with this approach, it is proposed to make CBDC-Retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets,” RBI’s Chief General Manager Yogesh Dayal wrote in a statement.
For the unversed, Central Bank Digital Currencies (CBDCs) are a virtual version of a country's fiat currency. Unlike regular digital currencies, CBDCs are issued by a central bank and are built on blockchain networks. They work similarly to cryptocurrencies but with the added advantage of being backed by a centralized authority. With CBDCs, people can make quick payments of large amounts, and all transaction history is permanently stored in an unchangeable format.
According to RBI, the expansion of CBDC will enhance access and expand the choices available to users. It will also help them check the resilience of the CBDC platform in handling multi-channel transactions. The central bank said that the necessary changes will be made to the system to facilitate this.
“This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions. Necessary changes will be made to the system to facilitate this”.
Last year, the State Bank of India introduced UPI interoperability with the digital rupee, later, Canara Bank also followed the same.
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