The RBI is preparing to embrace digital currency by announcing a pilot of CBDC with four banks. Earlier in February 2022, Nirmala Sitharaman, finance minister, revealed the government’s plan to launch its digital rupee. The central bank always portrayed a negative view of cryptocurrencies, believing them to be an asset encouraging Ponzi scams.
RBI prepares for Pilot India’s CBDC
Per reports, the Reserve Bank of India initially ordered four public-sector banks, State Bank of India, Bank of Baroda, Union Bank of India and Punjab National Bank, to begin CBDC trials. No tentative date has been confirmed concerning the digital currency launch; it’s speculated to be available by next year.
According to Money Control, the central bank is involved in conversations with several other fintech firms like FIS, banking solution providers who developed a CBDC lab. The RBI intends to ensure the trials are run properly so that quick adoption of CBDC is made possible. When shedding light on the new venture of RBI, the FIS senior director said they feel elated to offer a helping hand to the central bank’s effort to launch its digital rupee.
CBDC and its implications on the economy
Cryptocurrencies, since their inception, gained popularity because they eliminated the role of a third-party vendor from the transaction scenarios. However, the central bank-based currency is an attempt by central banks to ensure money is used judiciously by adhering to legal obligations. A CBDC is a digital asset backed by the central government and has lately caught much attention from several countries.
Cryptocurrencies often made headlines for their use in money laundering schemes, encouraging the government to launch CBDC, which will contribute to the digital economy and safeguard investors against any scams. Per reports, almost 87 countries have plans to launch their digital currency, and the number is believed to increase with time.
We hope the pilot of CBDC proves successful and Indians can accept digital currency wholeheartedly, ultimately developing the country’s digital economy.
