Indian central bank, the Reserve Bank of India (RBI) will commence the pilot launch of wholesale CBDC tomorrow, November 1, 2022. The central bank of the country has identified nine banks for participation in the first pilot launch. This is the first pilot in the Digital Rupee- wholesale segment.
The included banks are the State Bank of India (SBI), Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, IDFC First Bank, Yes Bank, and HSBC. The use case for this upcoming pilot launch is the settlement of secondary market transactions in government securities.
The use of the digital rupee can potentially make the interbank market more efficient. According to the central bank, the settlement in money would cut off transaction costs by preempting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.
The future pilots will be focused on wholesale transactions and cross-border payments based on the learnings from this pilot.
The first pilot in the Digital Rupee- retail segment (e₹-R) is planned to launch within a month in select locations under closed user groups including merchants and customers. The information related to the operationalization of e₹-R will be communicated as the project progresses.
Other than this upcoming launch, RBI recently stated that private crypto poses risks and undermines financial stability. According to the concept note, the CBDCs are the next step in the evolutionary progression of sovereign currency.
Also Read: RBI releases Concept Note on CBDC for India
