David Edwards
Shaktikanta Das, the departing governor of the Reserve Bank of India (RBI), has presented a revolutionary vision for the Indian economy, highlighting the possibility of a domestic digital currency known as the digital rupee or central bank digital currency (CBDC).
India’s Leading CBDC Innovation
In his final remarks on December 10, Das looked back on his six years at the RBI, where he made modernizing India’s financial institutions a top priority by utilizing cutting-edge technologies. Among his accomplishments were the creation of a regulatory sandbox for fintech development and the RBI Innovation Hub in Bengaluru.
Das positioned the RBI as a pioneer among international central banks by highlighting India’s advancements in the implementation of CBDC. The RBI has already started a pilot project for the digital rupee, even though many countries are still in the early phases of CBDC negotiations and trials.
On the other hand, he said, “RBI, among the central banks, is a pioneer,” as it is one of the few central banks to launch a pilot CBDC project.
The Digital Rupee as Currency of the Future
Das was upbeat about the digital rupee’s ability to revolutionize the Indian economy and saw it as a practical substitute for cash transactions.
“As I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.”
It is anticipated that the digital rupee will improve India’s standing in cross-border payments in addition to streamlining domestic transactions. In an effort to achieve instant settlement capabilities, the RBI added new trading partners from Asia and the Middle East to its cross-border payments infrastructure in November.
Ambitious but Cautionary Rollout
Das has continuously argued for a methodical approach to CBDC implementation, notwithstanding his zeal. Prior to a statewide deployment, he underlined the significance of utilizing pilot programs to collect user data and evaluate the possible influence on India’s monetary policy.
Das suggested that “the actual introduction of CBDC can be phased in gradually,” emphasizing the necessity of meticulous preparation to guarantee the digital rupee’s incorporation into India’s financial system.
A Perspective on Domestic and International Payments
The larger objective of updating its financial infrastructure is in line with India’s CBDC strategy. According to Das, the digital rupee would serve as a foundation for future payment systems, enabling smooth cross-border and domestic transactions.
Das’s work as governor created the foundation for India’s transition to a CBDC-driven economy, which will be vital in determining the country’s digital financial environment.
