Reserve Bank of India Governor Shaktikanta Das has urged caution in launching a central bank digital currency, as the retail pilot project now reaches over 5 million users.
India’s central bank digital currency platform has crossed the 5 million user mark as the country cautiously continues to expand its digital currency pilot program, according to Business Standard. a report.
Speaking at a conference in Bengaluru on Monday, August 26, Reserve Bank of India Governor Shaktikanta Das stressed the need for a measured approach to the rollout of the country’s central bank digital currency, also known as the e-rupee, stressing the importance of understanding its impact on users, monetary policy and the broader financial system. Das highlighted that comprehensive insights from pilot data are crucial before moving forward with wider implementation.
“CBDCs could be rolled out gradually. There is no doubt that CBDCs have the potential to support future payment systems, both for domestic payments and cross-border payments.”
Shaktikanta Das, Governor, Reserve Bank of India
The Reserve Bank of India launched its central bank digital currency project in December 2022, covering both the retail and wholesale sectors. The project, which currently has 16 participating banks, has expanded beyond initial payment use cases to test coding and offline functions. Das noted that coding could play a pivotal role, saying it could serve as a “key enabler of financial inclusion by ensuring that money reaches the intended user.”
Adoption of the e-rupee has been slow, with the Reserve Bank of India reporting 1 million retail transactions by late June, a milestone reached only after local banks offered incentives and partially paid employee salaries using the state-issued digital currency.
The Reserve Bank of India had previously urged banks to increase transactions to at least 1 million per day by late 2023 to test the system’s scalability. However, that push has since stalled, casting doubt on the future of the digital currency initiative due to the gap between incentivized metrics and actual user adoption.
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