The Reserve Bank of India (RBI) has selected at least five commercial banks to participate in its retail central bank digital currency (CBDC) trials. The banks include SBI, ICICI, IDFC, HDFC in RBI, according to India’s Economic Times, and the pilot is likely to go live soon.
Since the government announced plans for CBDC pilots in February, India has moved rapidly. It published a concept paper and roadmap for a digital rupee in October. At the start of this month, it launched its first wholesale CBDC trial targeting the settlement of government bond transactions.
The retail digital rupee tests will also involve the National Payments Corporation of India (NPCI), the organization responsible for most of India’s payment rails, including UPI. One of the key questions it plans to explore is whether the system will be interoperable with the current payment systems or to build a new framework. On the one hand, some level of interoperability is inevitable. But conceivably, one could have a CBDC that uses the same current payment rails.
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