Reserve Bank Of India Gears Up To Pilot CBDC In Collaboration With Fintech Firms And Banks
Before the end of the present fiscal year, CBDC will be introduced in India as a result of the trial comprising 3 stages. Reportedly, the FIS of the United States is taking part in this event. It has been locally reported by Monycontrol on 5th September that The Reserve Bank of India (RBI) is consulting with different state banks and fintech firms for piloting central bank digital currency (CBDC) in India.
RBI Arranges to Pilot a CBDC Project This Year
An anonymous official of a public bank has revealed that the trial will lead the Reserve Bank of India towards the release of a CBDC during the fiscal year 2022. The financial services firm of the United States named FIS was cited among the fintech organizations chosen by the Reserve Bank of India to consult with.
Moneycontrol has been ensured by Julia Demidova (the senior director at FIS) that a good collaboration is developed between FIS and the RBI. She added that they could trial releasing CBDC services by expanding the experiment span of the RBI. FIS has declared the exact date, 25th August 2022, for the inauguration of the CBDC Virtual Lab thereof on 25th August.
The firm was in advance enthusiastic in the space of CBDC as it organized roundtable meetings and conferences on the respective subject. The reports point out that the Reserve Bank of India is conversing with Bank of Baroda, Union Bank of India, Punjab National Bank, and state bank of India over taking part in the pilot. The government is the 50% shareholder of the aforementioned banks.
For a considerable period, the Reserve Bank of India has been pursuing a CBDC’s staged implementation and the most recent reports disclose that there would be 3 stages for the launch of a CBDC in India the accomplishment of which would be spanned in 2022 as well as 2023. Nirmala Sitharaman, the finance minister of India, is in favor of the implementation of a CBDC.
Indian CBDC to Challenge Local Crypto Market
An official from the RBI has additionally stated that the introduction of CBDC in India could positively influence the economic development of the country. The traditional unified system of India, which is considered a real payment system, has appeared as the challenger to the newly introduced system of payment (cryptocurrency).
A positive aspect of a central bank digital currency (CBDC) has been expressed by the RBI at the conference IMF in June. It mentioned that a CBDC could eliminate the entirety of the possible risks to the cryptocurrency. As crypto is not prohibited in India, the RBI is somehow skeptical about the nature of cryptocurrency regarding the impact of the huge amount of taxes that the participants of this industry are forced to pay.
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