RBI CBDC India digital rupee

RBI to begin CBDC pilots, outlines wholesale, retail concepts

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The Reserve Bank of India (RBI) will soon begin to pilot the digital rupee for specific use cases, it said in a concept note on its central bank digital currency (CBDC).

See related article: Sweden’s central bank to test use of retail CBDC for instant payments

Fast facts

  • India’s central bank said in the concept note that it recognizes the benefits of introducing both a wholesale and retail CBDC.
  • The RBI may introduce a token-based CBDC for retail as it would be closer to physical cash, while it may consider an account-based model for wholesale, the note said.
  • A token-based CBDC is like a banknote where the token represents ownership at a given time. 
  • In an account-based CBDC, a maintained record of transactions and balances of the asset’s history indicates ownership, the central bank said.
  • “CBDC is aimed to complement, rather than replace, current forms of money and is envisaged to provide an additional payment avenue to users, not to replace the existing payment systems,” the RBI said in its note.
  • The digital rupee will likely lean on a non-interest bearing design, just like physical cash, according to the RBI. 

See related article: Hong Kong seeks suitable use case to sell public on retail CBDC: report

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