India Targets 1 Million CBDC Users in 3 Months, Prioritizes Offline Transfers
The architects behind the release of retail-oriented central bank digital currency (CBDC-R) unveiled revised plans to scale the digital rupee user base to 1 million. The quarter-year targets feature in the latest plan to strategically overcome challenges confronting the creation of offline versions.
RBI’s CBDC Pilot Successful
The recent pronouncement by the officials from the Reserve Bank of India (RBI) revealed that the pilot phase of CBDC that began in December attracted 100,000 participants. While the public announcement by RBI officials indicated that the users aimed to realize 500,000 users, they secretly aim to accomplish double the target by July 2023.
An RBI source admitted that the 1 million users milestone is achievable, considering India has the world’s largest population. The source added that the RBI set 3 months as the tentative date to reach the double figure.
The official communication from RBI indicated that the central bank’s trial features wholesale and retail CBDC in its pilot phases. The executives revealed that the piloting of retail CBDC is actively available in over 15 cities with over 13 bank participants.
The statement by RBI revealed that the retail CBDC attracted over 100000 participants since its unveiling on December 1, 2022. The RBI executives consider the participation as remarkable within the four months.
Digital Rupee Dominates G-20 Conference
The digital rupee dominated the proceedings of the recent G-20 meeting chaired by India. During the meeting hosted in Bengaluru, RBI governor Shaktikanta Das lauded the digital rupee reception in his address to the media.
Governor Shaktikanta revealed in the April 6 address to the media lauded the input of the international financial sector stakeholders. He observed that the international stakeholders complemented the CBDC design though they are yet to witness the new currency beyond the pilot stage.
RBI Journey to Resolve Challenges Affecting Retail CBDC
The RBI statement confirmed launching the Hackathon project in 2023 to solve challenges hampering retail CBDC. Governor Shaktikanta indicated that the initiative seeks to reinforce scalability, transaction speed and facilitate offline transactions.
Critics of the digital rupee have portrayed the trinity objectives as impossible to accomplish. Another source indicated that only two of the objectives are attainable though expressed optimism that technological innovation would resolve the shortcoming.
RBI considers the journey toward a digital currency system critical to facilitating offline transactions to reinforce financial inclusion in the country’s emerging economies.
Governor Shaktikanta revealed that RBI anticipates executing tests on the viability of offline transactions through wearables and Bluetooth technology. Also, RBI would conduct tests using smart, credit, and debit cards.
Overcoming Double Spending Remains Unresolved Risk
The RBI governor regretted that the primary concern that the digital rupee would face is overcoming double spending risk. However, one executive confessed that RBI received over 50 proposals by the March 24 deadline to resolve the offline transactions challenges.
Governor Shaktikanta revealed private companies’ critical input when assessing the viable solutions to reinforce scalability. Nevertheless, the executive ruled out that RBI has partnered with prominent blockchain-based entities.
The RBI governor was noncommittal on the timeline for unveiling the retail CBDC on full-scale. Nonetheless, RBI had earlier revealed plans to roll out CBDC before 2024. It is still uncertain whether RBI will accomplish a million users in three months.
Editorial credit: Poetra.RH / Shutterstock.com
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