Reserve Bank Governor Shaktikanta Das said that Central Bank Digital Currency (CBDC), which is being marketed by the central bank, can play a significant role in cross-border payments.
According to him, the Reserve Bank’s experimental efforts to promote the CBDC have produced “excellent” results. The CBDC will now be expanded to the overnight money markets after being implemented as a trial in the wholesale and retail sectors.
He emphasized that paper currency will continue and that “CBDC is going to be the future currency of the world, and it is necessary that every central bank, every country works on CBDC.”
The world is shifting towards technology, and CBDCs have an important role, as they can facilitate efficient, cost-effective, and faster payment across jurisdictions for cross-border transactions, as per Governor Das.
He added, “We have to be self-dependent. We have to have our strong reserves. So with that objective, we have been building up very strong reserves and in fact, that has given great confidence to the market, that whatever be the challenge, India will be able to meet its external sector obligations.”
Das said at an interaction at IMF Governor Talks in Marrakesh, Morocco, earlier this month, “The learning has been excellent and more than what it was one year ago. We are even more convinced that CBDC can prove to be the most effective and efficient mode for cross-border payments in particular, other than of course domestic transactions.”