The Reserve Bank of India could commence preliminary central bank digital currency (CBDC) trials before the end of the year.
Speaking to CNBC on Thursday, RBI governor Shaktikanta Das said that the central bank was “being extremely careful” in its handling of a potential digital rupee even as its counterparts around the world are exploring their own sovereign digital currencies.
According to Das, the RBI’s focus is on examining the potential impact of a digital rupee on India’s financial sector with issues like monetary policy control high on the agenda.
On the technical side, the RBI governor also revealed that the central bank was weighing the merits of utilizing a centralized or decentralized ledger for its proposed CBDC.
Providing a likely timeline for the next phase of the project, Das remarked, “I think by the end of the year, we should be able to […] We would be in a position, perhaps to start our first trials.”
The RBI governor’s comments are in keeping with recent remarks from other central bank officials in the country about the progress of the planned digital rupee project.
RBI deputy governor Rabi Sankar stated back in July that the central bank was leaning towards a phased implementation strategy for its CBDC project.
With global financial bodies like the Bank for International Settlements pushing for CBDCs as a counter to cryptocurrencies and private stablecoins, several central banks are developing their own national digital currencies.
According to the Atlantic Council back in July, countries representing 90% of the entire global GDP are in several stages of CBDC exploration.
Among the major global economies, China continues to lead the way in the CBDC race with multiple pilot programs to incentivize the adoption of its e-yuan. Other countries in Asia are also moving forward with their digital currency plans.
International cooperation is also another major talking point in the CBDC space with regional digital currency initiatives taking shape in places like Asia and the Caribbean.