The Reserve Bank of India (RBI) is likely to introduce the pilot of the Central Bank Digital Currency (CBDC) for transactions for the interbank borrowing or call money market by October, stated central financial institution Executive Director Ajay Kumar Choudhary on Sunday.
The pilot for the wholesale Central Bank Digital Currency (CBDC) often known as the Digital Rupee-Wholesale (e-W) was launched on November 1, 2022. Initially, its use case was restricted to settling secondary market transactions in authorities securities.
RBI will introduce the wholesale CBDC
“The RBI will introduce the wholesale CBDC in the call market either this month or next month,” Choudhary stated on the sidelines of the G20 Leaders’ Summit.
The introduction of the CBDC was introduced in the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman. To facilitate this, obligatory amendments to the related part of the RBI Act, 1934, have been made with the passage of the Finance Bill 2022.
RBI chosen 9 banks for its pilot undertaking
The RBI chosen 9 banks for its pilot undertaking for wholesale CBDC. These banks are: the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank and HSBC.
Besides, the central financial institution has already rolled out a pilot in the retail model of the CBDC (e-R) on December 1, 2022. The e-R is in the type of a digital token that represents authorized tender.
It is being issued in the identical denominations because the paper forex and cash. It is being distributed by way of monetary intermediaries like banks. Users can transact with e-R by way of a digital pockets supplied by the collaborating banks.
The RBI is showcasing numerous digital initiatives in the monetary sector on the exhibition pavilion in the course of the G20 Summit. These embrace Public Tech Platform (PTP) for Frictionless Credit, CBDC, UPI One World, RuPay On-The-Go and Bharat Bill Payment System.
