Reserve Bank of India May Pilot Launch Its Digital Currency In 2022, Says Senior Official

A top central bank officer indicated at the State Bank of India's Banking and Economic Conclave that the Reserve Bank of India's digital currency might see a test launch in the first quarter of the next fiscal year.

The Business Standard reported that according to P Vasudevan, Chief General Manager at the Department of Payment and Settlement of the RBI, he believes that "somewhere it was said that at least by the first quarter of next year a pilot could be launched. So we are bullish on that."

Central bank digital currencies or CBDCs are digital or virtual versions of fiat currencies, such as the rupee in India.

The Governor of the central bank, Shaktikanta Das, had previously stated that a soft launch of the CBDC may be expected by December, but the RBI has yet to commit to a specific date.

However, Vasudevan said: "We are on the job and we are looking into the various issues and nuances related to CBDC. It's not a simple thing to just say that CBDC can be a habit from tomorrow on."

Additionally, he said that a CBDC could be valuable depending on how it is implemented, and there should be no rush to get one up and running.

The RBI, according to Vasudevan, is looking into several concerns, including whether the CBDC should focus on wholesale or retail, the validation procedure, and other issues such as distribution routes.

"The central bank is also checking if intermediaries can be bypassed altogether, and most importantly, checking if the technology should be decentralised or should be semi-centralised," he added.

These comments from the RBI CGM comes after the Governor of the central bank of India, Das said that India needs to have more in-depth discussions about cryptocurrencies as the government draughts legislation to regulate private virtual coinage.

At the State Bank's event Das said: "When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved. I'm yet to see serious, well-informed discussions in the public space on these issues."

Das's remarks come after a parliamentary panel of MPs reviewing the broad contours of Crypto Finance said that cryptocurrency cannot be halted, but it must be regulated. The meeting between the crypto business and the panel took place just days before the Parliament's winter session when the government is expected to introduce a cryptocurrency bill.

Meanwhile, at the Sydney Dialogue, Prime Minister Narendra Modi has urged democratic countries to ensure that cryptocurrencies do not fall into the "wrong hands," warning that new-age technologies have the potential to be exploited as weapons of war and dominance.

According to him, democracies must pool their resources to invest in future technology research and development, build a reliable manufacturing base and supply chain, and endeavour to prevent manipulation of public opinion.