CBDC: Indian Central Bank Begins Digital Rupee Pilot
The Reserve Bank of India (RBI), the country’s central bank, has started a pilot program of its digital currency today, in cooperation with nine banks. It also released a Concept Note on Central Bank Digital Currency (CBDC) for India.
Bloomberg reported that “several lots of bonds were traded,” citing data from Clearing Corporation of India Ltd. (CCIL), which showed “7.38% 2027 debt and 7.26% 2032 bonds were among the first to change hands using the new form of currency.”
Per the press release, the pilot for the wholesale segment (e₹-W) starts today, saying:
“The use case for this pilot is settlement of secondary market transactions in government securities. Use of e₹-W is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.”
The banks included in the pilot are the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank Ltd., Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and the Indian unit of HSBC Holdings Plc.
According to a circular quoted by The Hindu,
“Going forward, other wholesale transactions, and cross-border payments will be the focus of future pilots, based on the learnings from this pilot.”
The first pilot for the retail segment (e₹-R) is planned for lunch within a month in select locations and will involve closed user groups comprising customers and merchants, said the RBI press release.
Earlier, in a concept note, the RBI said that the e-rupee would provide the users the same experience of dealing in digital currency, but "without any risks associated with private cryptocurrencies."
According to the concept note
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