The Reserve Bank of India (RBI) announced on Thursday that it might begin preparations for its Central Bank Digital Currency (CBDC) trial before the end of this year. In a conversation with CNBC, the RBI governor, Shaktikanta Das, explained that although other central banks have set up their digital currency, the RBI is taking its time. He said:
“We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally.”
Das explained that the RBI is currently analyzing the pros and cons of adopting a digital currency. It would examine the digital currency’s impact on security, finance, currency circulation, and the country’s monetary policy. In terms of technology, the bank would weigh the benefits of a centralized or decentralized ledger for the CBDC.
Central banks around the world have either begun to create or are already well into the creation process of their digital currencies. The development is following global financial institutions like the Bank for International Settlements, pushing for CBDCs as a replacement for private stablecoins and cryptocurrencies. In July, a report by the Atlantic Council showed that countries that makeup 90% of the global gross domestic product are in different stages of their CBDC exploration.
Leading the way in CBDC exploration is China, with several pilot programs underway to boost the adoption of its e-yuan. Other Asian countries are also following closely with plans of creating their digital currencies.
Image Credits: Pixabay
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