India’s national digital currency (CBDC) incorporates blockchain-based components. Finance Minister Pankaj Chaudhary said this, according to Outlook India.
In response to a parliamentary question, the official said that transactions in the formats P2P and P2M are conducted via a digital wallet opened by the programme’s participating banks. The CBDC is issued as a digital token and has the same denominations as cash.
Like cash, the CBDC exhibits similar attributes of trust, security and settlement finality. The digital version bears no interest. It can be converted into bank deposits.
The retail version of the CBDC testing, with the participation of select merchants and consumers began on December 1. Eight banks are involved.
As part of full rollout, the pilots are expected to scale up, with more participating banks, users and broader geographic reach.
On 1 November tests of the wholesale version of the CBDC began. This variant will be used to settle transactions in government securities on the secondary market. It is expected to reduce transaction costs by removing the need for clearing and settlement infrastructure or collateral arrangements.
Earlier in June, RBI T. Rabi Sankar suggested that the CBDC could fully displace private virtual currencies, including Bitcoin.
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