On his final day in office, outgoing Reserve Bank of India (RBI) Governor Shaktikanta Das reaffirmed the transformative potential of India’s central bank digital currency (CBDC), commonly called the digital rupee. Speaking during his farewell address on December 10, Das reflected on his six-year tenure, emphasizing RBI’s pioneering efforts in embracing emerging technologies. India’s Pioneering CBDC Efforts Das highlighted RBI’s innovation-driven initiatives, including the establishment of the RBI Innovation Hub in Bengaluru and the introduction of a regulatory sandbox for fintech advancements. JUST IN: India's outgoing Reserve Bank of India (RBI) Governor Shaktikanta Das aims to boost economy with digital rupee, a homegrown Central Bank Digital Currency (CBDC) pic.twitter.com/pv9dpjuOtK — Coinwaft (@coinwaft) December 11, 2024 He noted that while several central banks globally are in the preliminary stages of CBDC exploration, India stands out as a trailblazer with its active pilot projects in retail and wholesale CBDC use cases. The RBI’s CBDC pilot includes both retail and wholesale applications and features 16 participating banks. The initiative has expanded beyond basic payments to explore offline and programmable use cases. Das highlighted the programmability feature as a significant enabler for financial inclusion, facilitating the precise delivery of funds to targeted beneficiaries. Despite its ambitious scope, the adoption of the digital rupee has been modest. By late June, only one million retail transactions were recorded, achieved through local banks’ incentivization measures, such as partially paying employee salaries using state-issued digital currency. Balancing Innovation and Caution As India Leads in Crypto Adoption While the RBI had initially pushed for 1 million transactions per day to assess scalability, the effort has slowed, raising concerns about long-term viability. RBI Deputy Governor T. Rabi Sankar emphasized the importance of patience and a measured approach . “A full understanding of the underlying CBDC technology’s impact is necessary before scaling its usage nationwide,” he said in November. India’s CBDC strategy also includes ambitious plans for cross-border payments. In November, the RBI sought to collaborate with trading partners in Asia and the Middle East to expand its instant settlement platform. The Reserve Bank of India (RBI) plans to expand its instant cross-border payments platform by including partners from Asia, the Middle East, and the UAE. Current agreements cover Sri Lanka, Bhutan, and Nepal. pic.twitter.com/K1xmwmHK3G — Neel (Crypto Jargon) (@Crypto_Jargon) November 24, 2024 A Bloomberg report suggested that CBDCs might become the primary settlement mechanism for this platform, which is already operational in Sri Lanka, Bhutan, and Nepal. India’s efforts in digital currency innovation are bolstered by its global leadership in crypto adoption. India ranks first in global crypto adoption , as blockchain analytics firm TRM Labs attributes this to the growing acceptance of digital assets. However, stringent regulations remain, including a flat 30% tax on profits from Virtual Digital Assets (VDAs) and a 1% tax deducted at source on crypto sales. The post India’s Central Bank Governor Sees Huge Potential of CBDC appeared first on Cryptonews .
