New Delhi: The Reserve Bank of India began the first pilot of Digital Rupee – Wholesale segment – on November 1. Now, the central bank will start the retail pilot project of the central bank digital currency (CBDC), for which it has roped in some top lenders like SBI, HDFC Bank.
India’s largest public sector lender State Bank of India, ICICI Bank, IDFC First Bank and HDFC Bank are among a shortlist of at least five lenders that the RBI has picked to work on the pilot of Digital Rupee – Retail segment, people in the know of it told Economic Times.
“Five banks have been shortlisted to run the pilot along with the help of NPCI (National Payments Corporation of India) and RBI. Some customer and merchant accounts will be chosen to roll out the retail digital rupee pilot soon,” said one of the persons.
More banks could be added to the retail pilot project, said the people.
The RBI is discussing if a new framework should be developed for retail CBDC (CBDC-R) or should it be interoperable with the current digital payments system. The retail digital rupee pilot is expected to go live soon.
The launch of CBDC-R can change the way we pay as “the full-fledged rollout CBDC has the potential to change the way we make payments”.
In the first pilot of CBDC-W on November 1, 48 G-Sec trades were carried out for a total of Rs 275 crore. The first G-Sec deal done in the Central Bank Digital Currency (CBDC) took place between ICICI Bank and IDFC First Bank.
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Meanwhile, the RBI is reportedly looking at anonymity for small-value retail payments up to Rs 50,000, replacing cash. “Reasonable anonymity for small-value transactions akin to anonymity associated with physical cash may be a desirable option for CBDC-R,” the bank had said in its CBDC concept note.
‘Two schools of thought’
According to the people in the know of the development, the bank is also considering whether to make current QR codes and the Unified Payments Interface (UPI) platform interoperable with CBDC-R. “There are two schools of thought within the RBI – one which wants an entire new system for transacting CBDCs, while the other wants it to be interoperable with all the current modes of payment,” said a banker.
“We will have to see what the RBI eventually decides,” the banker noted, adding that the digital currency is aimed at reducing the dependence on cash as it still forms nearly 80 per cent of the overall retail transactions in the economy.
