India previously announced plans to launch a central bank digital currency (CBDC) by March 2023, and recently said it would be a phased introduction. Last week a local news outlet report that the Reserve Bank of India (RBI) is discussing internal pilots of the digital rupee with the four state-owned banks, State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda. The information is based on sources and has not yet been officially confirmed.
Additionally, according to Money Control, the central bank is working with other service providers and fintechs, including FIS, the banking solution provider that recently launched its own CBDC Lab, to enable central banks and other ecosystem participants to experiment. The Lab includes functionality such as payments, programmable money and offline payments.
FIS’ Julia Demidova, who heads CBDC and Digital Currency Strategy, declined to mention any particular central banks. She told Ledger Insights via email, “We are working with several central banks on CBDC experiments and proofs of concept.”
She was keen to note that not only can the CBDC Lab be used by central banks for CBDC but also commercial banks for digital regulated money. Demidova certainly has the central bank contacts as she previously worked for the OMFIF think tank.
Previous OMFIF research in early 2020 showed that India showed a strong bias for digital currency and CBDC in particular. Other surveys, such as from Guardtime, have indicated that emerging market citizens are more willing to engage with CBDC. According to RBI statistics, Indians still prefer physical cash for small transactions under 500 rupees ($6), but the majority want digital above that amount.
Meanwhile, the head of India’s main payment rail, NPCI, responsible for UPI and other payment systems, recently called for an Indian Blockchain Platform.