Details of CBDC testing in IndiaRepresentatives of the Reserve Bank of India (RBI) said they are evaluating the potential of the central bank's digital currency (CBDC) for cross-border transactions and linking with legacy systems in other countries. The recently launched e-rupi has been tested for offline functionality. RBI chief executive Ajay Kumar Choudhary said.
Talking to CNBC-TV18, the specialist stressed, "We are looking forward to private sector and financial technology participation in CBDC. We will see their contribution, especially in offline and cross-border transactions of the central bank's digital currency." He also added that CBDC will soon become a medium of exchange and it will need all the functions of physical currency as well as anonymity.
India's motivation for launching CBDC was to improve financial inclusion in the region and become a leader in the digital economy. Choudhary also said that CBDC's digital currency would be a replacement for all cryptocurrencies.
Earlier, on Feb. 21, 2023, India's national payment network expanded its services to Singapore. The integration of the UPI-PayNow service allowed citizens of these countries to quickly send money abroad.
Ajay Kumar Choudhary recalled that 4 major Indian banks - State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank - will facilitate outbound money transfers. Axis Bank and DBS Bank India will facilitate incoming remittances, while Singapore's DBS Bank and Liquid Group will offer services to users in the region.
RBI is India's central bank and regulator. Earlier, on Nov. 1, 2022, it launched a wholesale digital rupee pilot and connected 50,000 users as well as 5,000 merchants for real-world testing. As of the end of last month,about 800,000 transactions worth $134 million had been made through wholesale CBDCs.
