The Reserve Bank of India (RBI) has announced the expansion of its Central Bank Digital Currency (CBDC) pilot program. The annual report released by the RBI revealed its plans to incorporate additional banks and locations into the ongoing pilot, aiming to enhance the use points and features of the nationwide digital currency, media reports said.
The RBI initiated the pilot program for the Digital Rupee, introducing it in the wholesale segment on November 1, 2022, and in the retail segment on December 1, 2022. The central bank preceded the pilots by issuing a ‘Concept Note’ on CBDC, raising awareness about digital currencies and outlining the planned features of the digital currency. Building upon the success of the initial phases, the RBI now intends to expand the CBDC-Retail pilot to fit more participating locations and banks.
Initially, the CBDC pilot involved four banks: State Bank of India, Yes Bank, ICICI Bank, and IDFC First Bank. Thereafter, four additional banks, namely Bank of Baroda, HDFC Bank, Union Bank of India, and Kotak Mahindra Bank, were included in the pilot. Currently, five additional banks are in the process of joining the pilot, namely Punjab National Bank, Federal Bank, Axis Bank, Canara Bank, and IndusInd Bank.
Moreover, the availability of the digital currency of India will extend beyond its initial launch cities. The CBDC retail pilot was initially introduced in New Delhi, Bengaluru, Mumbai, and Bhubaneswar, where consumers and merchants were counted to a closed user group (CUG) for seamless usage. However, the RBI has expanded the scope and included additional locations such as Gangtok, Ahmedabad, Chandigarh, Guwahati, Indore, Hyderabad, Kochi, Patna, Lucknow, and Shimla.