In the Reserve Bank of India’s annual report published on Friday, a phased introduction of a central bank digital currency (CBDC) is on the central bank’s schedule for the current financial year to March 2023. Progress on a digital rupee is subject to the outcome of a risk-based model for KYC and anti money laundering (AML) supervision.
Legislation to provide the framework to support a CBDC has already been enacted. In February, Finance Minister Nirmala Sithara announced plans to issue a digital rupee that uses blockchain and other technologies by March 2023. At the time, she gave the motivations as boosting the digital economy and managing currencies more efficiently.
Notably within the annual report, CBDC fell under the section on “regulation, supervision and financial stability” rather than payments. India already has efficient payment systems such as UPI, so that’s not the primary motivation.
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