India’s Central Bank RBI Starts Digital Currency Pilot With 4 Banks – According to Moneycontrol, which cited two unnamed bank officials, the Reserve Bank of India (RBI), the country’s central bank, has reportedly asked four public-sector banks to test India’s central bank digital currency (CBDC).
One of the officials was quoted as saying: “The RBI has asked State Bank of India, Punjab National Bank, Union Bank of India, and Bank of Baroda to run the pilot internally.”
“There is a pilot on CBDCs,” another senior public-sector bank official confirmed to the publication. “The RBI may come with the launch this year. When it will exactly roll out the product and specifications is to be seen.”
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According to reports, the Reserve Bank of India is also in consultation with a number of fintech firms over the digital rupee. FIS, a business with its headquarters in the United States, is one of them. It has been advising central banks on CBDC-related issues like offline and programmable payments, financial inclusion, and cross-border CBDC payments.
Julia Demidova, senior director at FIS, stated to the news source last week: “FIS has had various engagements with the RBI. Our connected ecosystem could be extended to the RBI to experiment with various CBDC options.”
“Whether it is a wholesale or retail CBDC transaction, our technology can also be extended to commercial banks where they can test and tokenize central bank money in the form of digital regulated money,” she added.
The RBI will issue a CBDC in this fiscal year, according to Nirmala Sitharaman, India’s finance minister, who made the announcement in February while presenting the government budget for 2022. The central bank announced in May that it would introduce the digital rupee in stages.
“The digital rupee will be the digital form of our physical rupee and will be regulated by the RBI. This will be such a system that will enable an exchange of physical currency with digital currency,” Indian Prime Minister Narendra Modi previously explained.
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However, the RBI is advocating for a ban on all cryptocurrencies such as bitcoin and ether. RBI Deputy Governor T. Rabi Sankar said earlier this year that cryptocurrencies have “no underlying cash flows” and “no intrinsic value,” adding that “they are akin to Ponzi schemes, and may even be worse.” The central banker stressed, “Banning cryptocurrency is perhaps the most advisable choice open to India.”