According to those acquainted with the matter the Economic Times reported, the Reserve Bank Of India (RBI) is trying to increase the use of central bank digital money, or e-rupee, for a wider range of wholesale transactions.
RBI had launched a pilot for wholesale Digital Rupee
As per the report, the source said “We are planning to use CBDC tokens for interbank call money market.” According to the source, the whole Central Bank Digital Currency (CBDC) is proposed to be expanded as tokens for call money settlement. The previous year in November RBI had launched a pilot for wholesale Digital Rupee, with use currently limited to the settlement of secondary market transactions in government securities.
Nirmala Sitharaman, the finance minister, announced the implementation of CBDC in the Union Budget 2022-2023; the necessary changes to the relevant part of the RBI Act, 1934, were made with the adoption of the Finance Bill 2022.
A CBDC trial for wholesale and retail transactions was launched by India’s central bank in 2022. Since its launch, 1.75 million people have joined the CBDC bandwagon.
Reserve Bank of India plans to increase the amount of e-rupee transactions in the retail sector by 40 times, from 20,000 to 25,000 per day in July to 1 million by the end of December, according to the report persons with knowledge of the situation said.
According to a report, the RBI will showcase CBDT and other digital tools, including UPI One World, Bharat Bill Payment System and RuPay on-the-go, to G20 delegates as India not only want to internationalise the rupee but also showcase how it has developed digital public infrastructure that is helping the government reach out to citizens and deliver the benefits.
India has already begun several levels of agreements and discussions for the implementation of UPI with nations in Africa and Latin America.
What Is CBDC?
A type of digital currency issued by a nation’s central bank is known as a central bank digital currency (CBDC). They are like cryptocurrencies, with the exception that the central bank sets their value, which is equivalent to the nation’s fiat currency. Fiat money is a government-issued currency that has no backing from a physical commodity like gold and silver.
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