India in ‘no hurry’ for CBDC development despite notching huge milestones – CryptoNewsTo

India in ‘no hurry’ for CBDC development despite notching huge milestones

The Reserve Bank of India (RBI) has stated that it will adopt a slow and steady process in developing a central bank digital currency (CBDC) rather than a fast-paced approach.

India’s central bank launched a digital rupee pilot at the end of 2022, racking up over 50,000 users and 5,000 merchants in less than two months. Despite the impressive numbers, the RBI noted that it would continue to approach a full-scale launch with caution to avoid significant disruptions to the financial system.

“We want the process to happen, but we want the process to happen gradually and slowly,” RBI Deputy Governor Rabi Sankar said. “We are in no hurry to make something happen so quickly.”

The announcement hints that the central bank will not take any more users in the pilot program. ICICI Bank, a leading partner with the RBI, confirmed that the slots for users and merchants are filled, but vacancies will be available in the coming months.

The metrics around the digital rupee pilot have been nothing short of impressive as the central bank confirmed that it recorded a total of 770,000 transactions since December 1. Eight commercial banks are participating in the CBDC experimentations, with the pilot taking place in five initial cities in the first phase.

In November, India began experimentation with wholesale CBDCs and followed it up with a retail pilot one month later, giving the illusion of a frenetic development. Sankar noted that although India is behind in the pecking order among nations developing CBDC, it will proceed tentatively.

“We have our targets in terms of users, in terms of merchants. We will go slowly,” Sankar said.

CBDCs are not easy like ABCs

India’s fears for CBDCs might stem from the challenges faced by countries that have launched digital iterations of their currencies. A keen example is Nigeria, the first African country to launch its CBDC after a pilot that barely lasted three months.

Since its launch, Nigeria’s eNaira has faced the challenges of low adoption, prompting the central bank governor to accuse commercial banks of stifling its growth. The country’s CBDC metrics have fallen below expectations despite government plans to leverage it to promote financial stability.

China’s digital yuan has also faced a rough patch following a stagnation in transaction volumes and app downloads. The digital yuan faces stiff competition from other payment services like Alipay, WeChat Pay, and UnionPay.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Blockchain in Middle East & South Asia

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One thought on “India in ‘no hurry’ for CBDC development despite notching huge milestones

  1. Não acho que o título do seu artigo corresponda ao conteúdo lol. Brincadeira, principalmente porque fiquei com algumas dúvidas depois de ler o artigo.

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