India will conduct its first retail digital currency pilot on Dec. and traders a month later it began evaluating the CBDC for the wholesale segment.
Four local banks — State Bank of India, ICICI Bank, Yes Bank and IDFC — will participate in the first phase of the pilot in four cities (Mumbai, New Delhi, Bengaluru and Bhubaneswar). Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will “next” participate in the pilot, the Reserve Bank of India said. The pilot will eventually be expanded to the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
“The scope of the pilot can be gradually expanded to include more banks, users and locations as needed,” the company said.
The central bank hopes to reduce the economy’s reliance on cash, enable cheaper and smoother international settlements and protect people from the volatility of private cryptocurrencies, RBI officials said in recent quarters. Based on the test results, the central bank will experiment with additional functions and applications of the digital rupee in future pilots.
India’s central bank has largely pushed its citizens to avoid crypto trading in recent years. Despite a ruling from the country’s apex court, the central bank continues to force the hand of banks into getting involved with crypto platforms in India, a move that has made the ramp a nightmare for the companies involved, people with immediate concerns said. knowledge of the case. .
Amid the collapse of FTX, which further erased the value of several cryptocurrencies, Rajeev Chandrasekhar, India’s state minister for electronics and information technology, tweeted that Indian investors were moving out of crypto due to the government’s “cautious guardrails of taxation and exchange controls”. . should thank the Prime Minister Narendra Modi for “his foresight and thus being saved from this crypto meltdown and losses.
In the wake of the uncertainty, the local ecosystem has seen some talent move abroad and a growing number of local entrepreneurs are building for the foreign markets and avoiding serving customers in India, the second largest internet market in the world.
Top crypto companies including Coinbase and Polygon, as well as local exchanges CoinDCX, CoinSwitch Kuber and WazirX this month established a new industry body to promote dialogue between key stakeholders and raise awareness about web3, months after the largest local crypto advocacy group disbanded .
The limited e-rupee rollout comes as several governments around the world are trialling digital versions of their currencies. Singapore’s monetary authority said in late October it will test a digital version of the local dollar. The central banks of China and the Bahamas have also experimented in this area. The National Bank of Kazakhstan plans to integrate its CBDC into the BNB Chain, crypto giant Binance said earlier.
But some have expressed concern about the uncontrolled proliferation of digital currencies.
Jeremy Fleming, the director of the UK’s Government Communications Headquarters, recently warned that Beijing was planning to use a range of technologies, including the digital currency, to control over markets and people. Beijing’s efforts to build a central bank digital currency could enable it to monitor transactions for oppressors and evade international sanctions in the future, he added.
“Users can transact with e₹-R through a digital wallet provided by the participating banks and stored on mobile phones/devices. Transactions can be either person-to-person (P2P) or person-to-merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. The e₹-R would offer features of physical money such as trust, security and finality of settlement. As in the case of cash, it will not bear interest and can be converted into other forms of money such as deposits in banks,” the Reserve Bank of India said in a press release.