The Reserve Bank of India is exploring the offline functionality of CBDCs
The Reserve Bank of India, RBI, sees a lot of potential with its CBDC and is currently exploring the offline functionality of the currency. The RBI is the central bank and financial regulatory body of India.
The digital rupee (e), India’s in-house CBDC (central bank digital currency), has received a positive reception in the market. RBI foresees the currency potential in fueling cross-border transactions, linkage with other country systems and plenty of offline functionality. Ajay Kumar, the executive director of RBI, revealed that there are currently ongoing tests for its offline functionality.
The bank officially started its pilot on November 1, 2022, by launching the wholesale segment pilot. It onboarded up to 50,000 users and 5000 merchants for real-world testing. By the end of February, up to $134 million and 800 000 transactions were completed through wholesale CBDCs.
In an interview with CNBC TV18, Kumar revealed that RBI is checking the CBDC’s potential for cross-border transactions and links with legacy systems in other countries. He mentioned that they look forward to seeing the contribution of fintech and the private sector in CBDC. He believes that CBDC will be embraced as a medium of exchange, and thus it must include features of a physical currency, including anonymity.
India launched the CBDC intending to fuel the digital economy and improve regional financial inclusion. According to Kumar, it is a matter of time, and CBDCs replace cryptocurrencies.
Based on the plan, different Indian banks will participate in outgoing and incoming remittances.
Four banks, Indian Bank, State Bank of India, Indian Overseas Bank, and ICICI Bank, will handle outgoing remittances. Axis Bank and DBS Bank India will deal with incoming remittances. DBS Bank and Liquid Group in Singapore are set to provide the service to users in the region.
Through the unified payments interface (UPI), India’s national payment network is already going global. It recently expanded to Singapore, enabling cross-border remittances between India and Singapore.