The Reserve Bank of India (RBI) published a report on national digital currencies. It states that the prototype of the digital rupee will be launched “in the near future”.
The RBI has pledged to periodically disclose information about its functions and benefits.
CBDC can be used in wholesale as well as retail variants, as the regulator studies both options.
The document notes that several design models are being discussed. In the wholesale CBDC it will be account-based and issued by the RBI, while in the retail version it will be token-based and operated by an intermediary.
The RBI mentioned the need for “reasonable privacy for low-value transactions.” This would ensure parity with cash, which does not pay interest to its holders.
The central bank has not yet decided on the technology that will underpin the CBDC. The document notes the possibilities of adapting blockchain as it develops.
The report examines various options and aims to raise awareness of the CBDC with weighty arguments. The latter would make the digital rupee “as attractive as cash”.
The document also mentions associated risks and notes the need for a phased rollout of the pilot program.
Back in early 2021, the RBI began studying the potential of the digital rupee.
In June, RBI deputy governor T. Rabi Sankar suggested that CBDC are capable of completely displacing private virtual currencies, including Bitcoin.
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