India’s Central Bank Plans Transition to a CBDC-Based Economy

India is set to restructure its economy with a central bank digital currency (CBDC) as its foundation, according to Shaktikanta Das, the outgoing head of the Reserve Bank of India (RBI).

The official reviewed the efforts to implement new technologies over the past six years.

Initiatives included the establishment of an innovation hub in Bangalore and a fintech innovation “sandbox.”

Das also highlighted the central bank’s pioneering role in CBDC. Under his leadership, the RBI launched a pilot project for the digital rupee, while other regulators “remained stuck at the initial stages of discussions and experiments.”

“CBDCs have enormous potential in the coming years. In fact, they are the future of money,” Das noted.

The RBI chief expressed confidence that national digital currencies could become the foundation of future payment systems for both domestic and cross-border transactions.

Earlier, Bloomberg reported on the regulator’s exploration of using CBDC as a settlement mechanism for a platform linking India with Sri Lanka, Bhutan, and Nepal.

In 2023, the RBI began negotiations on cross-border payments based on the digital rupee with 18 countries.