The Reserve Bank of India’s deputy governor T Rabi Sankar believes that domestic payments are pretty efficient, but cross border payments are “stuck in the last century.” He expressed an interest in using central bank digital currency (CBDC) to address challenges but did not explicitly say India’s digital rupee project would prioritize cross border payments.
In contrast, another report two weeks ago citing insider sources stated that wholesale CBDC would be the first priority, followed by retail CBDC. The central bank has said it will roll out a digital rupee by March 2023 in a phased manner.
Talking about international payments, Rabi Sankar said, “CBDCs, in my view, is the most efficient answer to this… For example, if India and the US have CBDCs, we don’t have to wait for the banks to be open to settle transactions. The central banks on either side need not be open to get the finality of settlement. That massively takes out the settlement risk from cross-border transactions. So, the internationalisation of CBDCs is something I am looking forward to.” Money Control reported Sankar as making the statement today.
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