Today the Reserve Bank of India announced it plans to start its first wholesale digital rupee pilot tomorrow. Earlier this month, it published a paper outlining its central bank digital currency (CBDC) plans which included both a wholesale and retail CBDC. The test that starts tomorrow is to settle secondary market transactions in government bonds.
The goal is to reduce transaction costs by removing the need for centralized intermediaries to guarantee settlement and reduce the need for collateral to address settlement risk. In India, the Clearing Corporation of India Limited (CCIL) is the central counterparty through which government securities are usually settled.
Based on what’s learned from this pilot, the plan is to progress to other wholesale transactions and cross border payments.
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