Reserve Bank of India preparing to trial a CBDC with public sector banks and fintechs

Regulation

The Reserve Bank of India (RBI) is in talks with fintech companies and state-controlled banks about a trial run of a central bank digital currency (CBDC), local publication Moneycontrol reported on Sept. 5. An unnamed public sector bank official told the publication that the trial may precede an RBI launch of a CBDC this fiscal year.

U.S.-based financial services company FIS was mentioned as one of the fintech companies with which the RBI is consulting. FIS senior director Julia Demidova confirmed to Moneycontrol that, “FIS has had various engagements with the RBI […] and, of course, our connected ecosystem could be extended to the RBI to experiment various CBDC options.”

FIS announced the launch of its CBDC Virtual Lab on Aug. 25. The company was already active in the CBDC sphere as the host of conferences and roundtables on the topic.

The RBI is reportedly in talks with public sector banks State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda on participating in the trial. The government owns at least a 50% share in those banks.

Related: India needs global collaboration to decide on crypto’s future, says finance minister

The RBI has long stated that it was looking at a phased implementation of a CBDC, most recently saying that an Indian CBDC would be introduced in three steps in 2022 and 2023. Indian finance minister Nirmala Sitharaman has spoken favorably about the influence a CBDC would have on the country’s economic growth.

India’s Unified Payments Interface real-time payment system has been presented as a competitor to cryptocurrency and, by its nature, to CBDCs. An RBI official also told an IMF conference in June, “We believe that central bank digital currencies (CBDCs) could actually be able to kill whatever little case that could be for private cryptocurrencies.” The RBI has been deeply suspicious of cryptocurrency and, while crypto trading is not illegal in the country, taxes imposed this year have had a chilling effect on the industry.

Articles You May Like

Elon Musk Plans to Launch Alternative Phone if Apple, Google Boot Twitter off Their App Stores
Crypto lender Hodlnaut reportedly faces police investigation in Singapore
Block Earner CEO calls for licensing clarity after being sued for crypto products
JPMorgan Chase Granted Wallet Trademark Covering Various Virtual Currency and Crypto Payment Services
RLWC 2021 Concluded: CoinEx Witnesses the Big Moments as the Exclusive Cryptocurrency Trading Platform Partner