Not in a hurry to launch CBDC; have to proceed carefully: RBI Guv Das

Central bank to consider findings of pilot projects before decision, he says

The Reserve Bank of India (RBI) is not going to hurry the launch of the central bank digital currency (CBDC) and it will do so after considering the learnings from pilot projects, said Governor Shakitkanta Das on Wednesday.

The idea is to introduce CBDC without disruption, so the central bank is going to proceed "very carefully", he said. The central government's budget this year announced a Digital Rupee will be issued by RBI in FY23.

Separately, the RBI plans to launch the digitised Kisan Credit Card (KCC) loans in 2023, after accounting for the learnings from a pilot in Madhya Pradesh and Tamil Nadu.

The pilot for CBDC in the wholesale segment commenced from November 1. The use case for this pilot is the settlement of secondary market transactions in government securities. On the first day, 48 trades worth Rs 275 crore were carried out and on the second day, 45 trades worth Rs 290 crore were carried out.

Das stopped short of giving a date when the CBDC will be launched for wider use. “I don’t want to give a target date by which time the CBDCs will be launched in a full-scale manner because this is something where we have to proceed very carefully. We don’t want to be in a great hurry, we want to learn from the experiences from the pilots we are running,” he said at an event in Mumbai.

“There will be some technological challenges, process challenges. We want to find out all those aspects and introduce it in a manner that the whole process of introduction and the results thereafter are non-disruptive,” he said.

Das termed the commencement of the CBDC pilot as a landmark moment in the history of money and currency in the country. RBI has defined CBDC as legal tender issued by a central bank in a digital form. CBDC will complement, rather than replace, money. It will be an additional payment avenue for users.

The CBDC pilot for the retail segment will be launched this month. “Depending on the learnings we have from the CBDC pilot project and the learnings from the end-to-end digitized KCC loans, our endeavor is to drive and launch the CBDC in a full-fledged manner in the near future. In fact, the retail part of the CBDC trial will be launched later this month,” Das said.

According to an RBI concept note issued earlier this month, the key motivations for introducing CBDC include reduction in operational costs involved in physical cash management, efficiency, and innovation in the payments system, boosting innovation in cross-border payments space, and providing the public with uses that any private virtual currencies can provide, without the associated risks.

Based on the learnings of the end-to-end digitised loans, KCC will be launched for farmers and small and medium enterprises. If everything goes according to plan, RBI hopes to launch it by 2023.