Categories: Banking

RBI plans digital currency pilots soon

The Reserve Bank of India is currently working on a phased implementation strategy for its own digital currency, Central Bank Digital Currency (CBDC), and will launch it in the wholesale and retail segments soon. India is already a leader in digital payments, but cash remains dominant for small-value transactions. RBI is currently examining the scope of CBDCs, the underlying technology, the validation mechanism, distribution architecture and degree of anonymity etc.

The primary idea for the RBI is to protect consumers from the appalling level of volatility seen in some or many of the virtual currencies that have no sovereign backing. Though the phased rollout of digital currency augurs well for India, it will come with its own challenges.

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Digital currencies are gaining more and more traction by the day, and there are countries that have launched or are going to be launching digital currencies, including Ecuador, Tunisia, Senegal, Sweden, Estonia, China, Russia, Japan, Venezuela, and Israel.

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Sumit Arora

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