India’s CBDC Pilot Surpasses 5 Million Users: RBI Governor Urges Caution in Nationwide Rollout

India’s CBDC Pilot Surpasses 5 Million Users: RBI Governor Urges Caution in Nationwide Rollout

India’s central bank digital currency (CBDC) pilot has reached a milestone, surpassing 5 million users. Despite this achievement, Reserve Bank of India (RBI) Governor Shaktikanta Das has advised a cautious and gradual approach to the nationwide rollout of the CBDC. Speaking at a conference in Bengaluru, Das emphasized the importance of fully understanding the CBDC’s impact on users, monetary policy, and the broader financial system before a complete rollout.

The RBI initiated pilots for both retail and wholesale CBDCs in late 2022, following an announcement by the Finance Minister in the 2022 budget speech. By the end of 2023, the retail CBDC had facilitated over a million transactions in a single day, supported by participating banks. Currently, 16 banks are involved in the retail CBDC pilot, although specific daily transaction figures were not disclosed.

Das stressed that the full implementation of the retail CBDC should be phased in gradually to avoid potential risks and ensure a thorough understanding of its effects. Since early 2023, the RBI has been exploring advanced features of the CBDC, such as offline payments and programmability. Das highlighted the potential of the programmability feature to enhance financial inclusion, particularly through recent pilot initiatives aimed at farmers. These initiatives include programming funds for specific agricultural inputs and generating carbon credits, which could help establish farmers’ identities and provide targeted financial support.

Looking forward, Das indicated that additional features, such as anonymity and offline availability, are under consideration for gradual implementation as part of the ongoing pilot program.

India’s position on cryptocurrencies has been somewhat ambiguous. The imposition of strict crypto taxes in 2022, coupled with a market downturn, led Indian traders to shift to international exchanges, negatively impacting the local crypto industry. However, trading volumes have since returned to Indian exchanges following a ban on offshore entities.

In a related development, India has been training its authorities on cryptocurrency forensics. Last year, the country provided training to officers from various cybercrime and police departments, equipping them with skills to combat cryptocurrency-related crimes. Under the National Cybercrime Bureau (NCB), 141 officers received specialized training on darknet investigations, cryptocurrencies, and digital intelligence gathering.

This training initiative aligns with India’s broader goal of achieving global consensus on cryptocurrency policies during its G20 presidency in 2023. While India successfully secured agreement from all G20 members on global guidelines, the country faced criticism for advocating global consensus without having its own comprehensive crypto legislation in place.

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