The Reserve Bank of India (RBI) will launch its CBDC or Digital Rupee for the wholesale market on November 1, it said in a press statement. To start with, the digital rupee will be used for the settlement of transactions of government securities in the secondary market. The existence of central bank-sponsored digital money preempts the need for a settlement guarantee infrastructure and mitigates the risks of settlements.
In the next phase of the pilot, the Indian central bank plans to focus on other kinds of transactions in the wholesale segment and cross-border payments. It also plans to launch a similar pilot for the retail segment where the digital rupee will be released within a closed group of customers and merchants in select locations.
Right now, a group of nine banks has been selected for this project in which there are three public sector and five private sector banks. One among them is an international bank — HSBC.
Earlier this month, RBI released a concept note on the upcoming launch of the Digital Rupee where it said the idea of launching the digital rupee is to educate people about digital cash and the Digital Rupee which will be introduced in a graded manner in the country’s payments and settlements system.
The legal framework for the launch of the Indian CBDC was provided by amending the RBI Act during the budget session of parliament earlier this year.
