It was only a matter of when for the Indian central bank to join the CBDC race.
RBI Exploring the Need for Digital Rupee
According to a booklet on payment systems published by the Reserve Bank of India (RBI) on Monday, the country’s central bank is weighing the necessity for a central bank digital currency (CBDC).
Specifically, the RBI said if there is a need for a digital rupee, then it will explore how to operationalize it.
The central bank noted:
“Private digital currencies (PDCs) / virtual currencies (VCs) / crypto currencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it.”
Notably, this is not the first instance that India’s lender of the last resort has made official statements in relation to the launch of a potential CBDC. As previously reported by BTCManager in December 2019, after a series of meetings with other central banks, the RBI revealed it was contemplating the possibility of launching its own CBDC.
At the time, however, RBI governor Shaktikanta Das also noted that was “too early” to talk about a CBDC due to technological barriers. He said:
“As and when the technology evolves with adequate safeguards, I think it is an area where the Reserve Bank will certainly look at seriously at an appropriate time.”
Meanwhile, China Continues to Dabble in CBDC
While India is still seemingly in double minds with regard to launching a fully-functional CBDC, neighboring country China has already made considerable progress concerning the same.
BTCManager reported in October last year how the residents of Shenzhen had got an opportunity to participate in a lucky draw where the winners would receive $7,500 worth of digital yuan airdrops as part of a CBDC campaign.
Since then, the campaign has only picked up steam with the latest development being that the city of Shenzhen is preparing for its third digital yuan airdrop worth $3 million.