The Reserve Bank of India (RBI) has revealed its plans to extend the pilot of its Central Bank Digital Currency (CBDC) to additional banks and locations, according to its annual report. The central bank intends to incorporate more use cases and features into the national digital currency throughout the year.
The CBDC pilot project was initially launched in phases, starting with pilots for the Digital Rupee in the wholesale and retail segments on November 1, 2022, and December 1, 2022, respectively. The pilots were preceded by the issuance of a ‘Concept Note’ on CBDC, which aimed to raise awareness about CBDCs in general and highlight the planned features of the digital currency.
The expansion of the CBDC pilot for the retail segment will involve including more participating banks and extending to additional locations. Initially, the pilot included four banks: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank.
Later, four more banks joined the pilot: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. Currently, five additional banks, namely Punjab National Bank, Canara Bank, Federal Bank, Axis Bank, and IndusInd Bank are in the process of joining the pilot.
To facilitate the easy usage of the retail CBDC, the pilot was initially introduced in Mumbai, New Delhi, Bengaluru, and Bhubaneswar, where customers and merchants were added to a closed user group (CUG). However, the list of locations expanded to include Ahmedabad, Chandigarh, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
The RBI’s efforts to expand the CBDC pilot and enhance its features reflect the growing importance of digital currencies and their potential impact on the Indian economy.
