The issue of cross-border payments is a priority area for G20. Notwithstanding the progress made so far, the key challenges to existing cross-border payments continue to be high cost, low speed, limited access, and insufficient transparency, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday addressing the G20 TechSprint Finale 2023 in Mumbai.
Governor Das was positive on the data part that the central bank is aggressively working on and said, the empirical data that we are generating would go a long way in shaping the policies and future course of action relating to CBDCs.
CBDCs can play an important role in making cross-border payment cheaper, faster, and more secure with its instant settlement feature.
Also, the cross border payments can be made more efficient through adoption of CBDCs.
India is focusing on the way technology can be harnessed to bridge gaps, empowering individuals and promote financial inclusion, Das said.
India has a robust startup ecosystem, vibrant talent pool and unwavering commitment to digital transformation, he added.
The 2023 TechSprint is a joint initiative between the BIS Innovation Hub and RBI. This year, the problem statements on cross-border payments were the subject of the 2023 TechSprint.
Last year, RBI launched pilots of CBDC in both Wholesale and Retail segments. The pilot in wholesale segment, known as the Digital Rupee -Wholesale (e₹-W), was launched on November 1, 2022. The use case was limited to the settlement of secondary market transactions in government securities.
The central bank anticipated that the use of (e₹-W), will make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.
The pilot in retail segment, known as digital Rupee-Retail (e₹-R), was launched on December 1, 2022, within a closed user group (CUG) comprising participating customers and merchants.
