India tests offline functionality of digital rupee

The Reserve Bank of India (RBI) is testing the offline functionality of its newly-launched central bank digital currency (CBDC), the digital rupee, according to Ajay Kumar Choudhary, the executive director of the RBI. The move comes after the RBI launched the wholesale segment pilot for the digital rupee on November 1, 2022, onboarding 50,000 users and 5,000 merchants for real-world testing.

Since the launch of the wholesale CBDCs, around $134 million worth of transactions have been completed as of February 25, with 800,000 transactions taking place. These figures indicate the growing popularity and potential use cases of CBDCs in India.

The digital rupee is expected to provide numerous benefits, such as reduced transaction costs, increased financial inclusion, and enhanced security features. The RBI aims to provide a digital alternative to the traditional physical currency, making transactions faster, cheaper, and more efficient.

With the offline functionality of the digital rupee being tested, users can continue to make transactions even in areas with poor or no internet connectivity. This is an important feature for a country like India, where internet penetration is still low in certain regions.

The pilot for the digital rupee has been launched in the wholesale segment, which caters to financial institutions and large businesses. However, the RBI plans to roll out the digital currency to the general public in the future.

India is not alone in its efforts to launch a CBDC. Several countries, including China, Sweden, and the United States, are exploring the possibility of introducing their own digital currencies. The rise of CBDCs is expected to have a significant impact on the traditional banking system, as they have the potential to change the way people store, transfer, and access money.

In conclusion, the testing of the offline functionality of the digital rupee is an important step towards the wider adoption of the CBDC in India. The wholesale segment pilot has already shown promising results, and the RBI’s plan to introduce the digital rupee to the general public could revolutionize the country’s financial sector.


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India to Test Viability of Digital Rupee to Cut Fees When Trading Securities

The Reserve Bank of India (RBI) is launching a wholesale pilot program involving its Central Bank Digital Currency (CBDC) also dubbed the Digital Rupee.


According to a Press Release published by the apex bank, this first pilot phase is centered on the use of the Digital Rupee for the settlement of secondary market transactions in government securities.

The RBI wants to see if the potential legal tender can reduce some of the drudgeries that are being experienced in the inter-bank market and make it generally more efficient.

“Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk,” the RBI said in the issued release, setting the focus for future pilots by asserting that “other wholesale transactions and cross-border payments will be the focus of future pilots, based on the learnings from this pilot.”

The motivation to float CBDCs has been a central push for many Central Banks around the world. With more than 110 already conducting one form of research into the new form of money. With the evolution of financial technology as popularized by the advent of cryptocurrencies, a scenario that made preempted RBI to move to ban crypto in favor of the Digital Rupee.

India comes off as one of the countries whose RBI has maintained a steady course in the design and development of its Digital Rupee. 

The apex bank has been interfacing with financial institutions and it confirmed that this current wholesale pilot will enjoin participation from Nine banks including but not limited to the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, Yes Bank, IDFC First Bank, and HSBC have been identified for participation in the pilot.

The RBI said the retail pilot for the Digital Rupee will be launched within a month and will see select participation in select locations across the country.

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RBI Releases Publication of CBDC to be Issued in India

The FinTech department of the Reserved Bank of India (RBI) recently released concept notes on the issuance of its Central Bank Digital Currency (CBDC) in India. 


This was revealed in a tweet from the RBI’s Twitter account on Saturday. The publication simply explained the objectives, options, merits and demerits associated with issuing a CBDC in India otherwise known as the Digital Rupee.

The Central Bank Digital Currency (CBDC) is a digital form of banknote issued by the central bank of a particular country. It is issued based on the specific requirements of any given country.

The launch of the digital rupee was first announced in the February 2022 Unions budget parliament by the government of India for the fiscal year 2022-2023 onwards. The budget also laid out broad goals to be achieved by implementing a CBDC using blockchain and other technologies such as a more efficient and cheaper currency management system.

India’s CBDC is expected to possess key features such as; cross-platform support that enables the development of various client applications using CBDC for Financial Services, the ability to integrate with other IT platforms in the digital space, highly scalable to perform a large volume of transactions and highly efficient to monitor and prevent fraud.

India’s Involvement in Blockchain Technology

The CBDC works just like any country’s fiat currency. It can be used as a means of payment for making financial transactions. 

India is very much interested in developing its CBDC for an enhanced digital experience. The growing adoption of non-government digital currencies has raised concerns with the RBI, which says such virtual assets could disrupt the financial ecosystem.

The central bank of India has set up a group to explore the possibilities of a rupee-backed digital currency. Since the advent of private digital tokens, CBDC issuance has sought to reduce the cost of creating paper and metallic money.

Maersk-IBM which is the largest shipping port operator in India announced its involvement in using blockchain technology in its business processes, to show a broad-based embrace of India to the underlying technology.

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Indian Finance Minister Sees “Clear Advantages” in CBDC

India’s Finance Minister, Nirmala Sitharaman, has hailed the Central Bank Digital Currency (CBDC) being developed by the Reserve Bank of India (RBI).


Speaking at the India Global Forum’s annual summit, the minister said the decision to develop the Digital Rupee project was based on consultation between the RBI and the government, noting both parties see a clear advantage in the initiative.

“It was a conscious call taken in consultation with the central bank- the Reserve Bank of India. We would like them to design it the way they would like to do it, but this year we expect the currency to come out from the central bank itself,” Sitharaman said in response to a question on Digital Rupee. “We see clear advantages in a central bank driven digital currency, because in this day and age, bulk payments happening between- countries, large transactions between institutions and large transactions between central banks themselves of each country- are all better enabled with digital currency.”

With 2022 being the targeted timeline according to the minister, the development of the CBDC will now trail-related projects from other advanced economies around the world, including China, Singapore, and Japan, amongst others.

India has taken a long route in relation to its handling of digital currencies and the eventual decision to float its own digital currency. Whether or not the authorities admit, the growth of digital currencies represents a major factor backing the decision to launch its own CBDC. However, Indian lawmakers have long contemplated whether to ban crypto assets like Bitcoin or to accommodate them to co-exist with any potential Digital Rupee that will be floated.

When asked about the impending regulation for the cryptocurrency ecosystem, Minister Nirmala said the decisions to ban these coins or not would be hinged on whether the government has a legal basis to do so or not.

In her words:

“The consultations are on anybody interested in this domain are welcome to participate, after the consultation process gets duly completed, the Ministry would probably sit and mull over it, which is required because we need the executive to be sure that we are not crossing any legal requirements, post which we will be coming out with what’s our position on it.”

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India CBDC pilot may commence in December, says RBI governor

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.

As previously reported by Cointelegraph, RBI deputy governor Rabi Sankar stated back in July that the central bank was leaning towards a phased implementation strategy for its CBDC project.

Related: IMF, World Bank and BIS champion central bank digital currencies at G20

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.