RBI releases details of its digital currency pilot program, confirming the launch of the program will take place ‘soon’

The Reserve Bank of India (RBI), the country’s central bank, has announced that it will shortly begin “limited test launches” of the digital rupee for particular use cases. The final architecture will be chosen based on the results of testing several technical possibilities, according to the central bank.

RBI Prepares to Launch Digital Rupee Pilot

The Reserve Bank of India (RBI), the country’s central bank, on Friday released a document titled “Concept Note on Central Bank Digital Currency.” The RBI stated that it has been weighing the advantages and disadvantages of establishing a central bank digital currency “for some time” and that the 51-page document discusses the “objectives, alternatives, benefits, and risks of issuing” a central bank digital currency (CBDC) in India.

The RBI clarified that the upcoming CBDC, also referred to as e₹ (digital rupee) “is substantially not different from banknotes, but being digital it is likely to be easier, faster, and cheaper.”

The report details: “RBI is currently engaged in working towards a phased implementation strategy, going step by step through various stages of pilots followed by the final launch, and simultaneously examining use cases that could be implemented with minimal or no disruption.”

“Depending on the different use cases, multiple technological options shall be tested and based on the outcomes, the final architecture shall be decided,” the report adds, noting that the central bank is “deliberating on the various aspects of technological choices available.”

Moreover, the RBI is “exploring the option of implementation of account-based CBDC in wholesale segment and token-based CBDC in retail segment vide a graded approach.”

The concept note also details the planned features of a digital rupee and the RBI’s approach toward introducing a digital currency. A number of key considerations are discussed in the report, including technological and design choices, issuance mechanisms, privacy issues, as well as the implications of CBDC introduction on the banking system, monetary policy, and financial stability.(sources:news.bitcoin.com)

“CBDC, the central bank digital currency, holds a lot of promises by way of ensuring transparency, and low cost of operation among other benefits and the potential to expand the existing payment systems to address the needs of a wider category of users,” the central bank concluded, adding: “The Reserve Bank will soon commence limited pilot launches of e₹ for specific use cases.”

As per the RBI, the way forward requires elaborate planning in terms of scope, cost, and timelines to ensure the timely implementation of CBDC phases.

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