The Reserve Bank of India is looking to expand the use of central bank digital currency or e-rupee for a broader range of wholesale transactions, according to official sources.
“We are planning to use CBDC tokens for interbank call money market,” an RBI source said.
The central bank introduced the wholesale pilot for CBDC transactions last year, limited to government bond auctions. In July, ET reported that RBI had carried out initial trials of digital currency in the interbank call money market.
The announcement comes after the RBI Governor Shaktikanta Das, Monday, stated that cross-border payments could be made more efficient via the adoption of digital currencies.
The government is also making a beeline to push for central bank digital currency or the e-rupee in the retail segment. The RBI aims to increase the volume of e-rupee transactions in the retail segment 40 times from 20,000-25,000 per day in July to 1 million by December end, the person aware of the developments said.
CBDC has been able to amass 1.75 million users since its launch last year. “A token amount in CBDC will be given to delegates attending the G20 summit,” the person further pointed.
However, the person noted that there was no date yet of closing the CBDC pilot, as there was a need to fully understand the impact of digital currency on financial system.
“We need to generate data and understand risks to move towards a launch,” the person indicated.
RuPay, UPI push
The country is also looking to promote its other digital products.
“We are confident of making RuPay a global product, and efforts are on to internationalise Unified Payments Interface as well,” RBI sources aware of the developments indicated.
They further highlighted that there was no push to promote Rupay debit cards, and the purpose is to popularise RuPay based on merit.
“Popularising of RuPay has to be based on merits, can’t be done through regulatory measures,” the person further stated, pointing to developments like RuPay On-The-Go, which allows users to make contactless transactions using wearables like smart watches, rings and fitness bands.
On the issue of internationalisation of UPI, ET has learnt that India is at various stages of negotiation and discussion with Latin American and African countries for its adoption.
India will feature these innovations at the innovation pavilion of Bharat mandapam during the G20 summit, with facilities like UPI One World, Bharat Bill Payment System for cross-border transactions, CBDC and Public Tech Platform for Frictionless Credit in India on display.
The central bank had launched the pilot for Public Tech Platform for Frictionless Credit with the aim to link digital records to make credit easily available.
While the initial focus was Rs 1.6 lakh loans for Kisan Credit Card holders and dairy farmers, the central bank will expand the project to cover MSME credit, personal loans, small loans (up to Rs 1 crore), the official source indicated.
“Car loans will be linked eventually,” they further added.
The government has disbursed Rs 100 crore of credit in the KCC and dairy farmer category since the start of the scheme.
Digital Public Infrastructure is a prominent theme of this year’s G20 summit.
