- The Rupee 3.0, a cryptocurrency issued by the central bank of India, has begun its testing period and could reach the financial market by the end of 2022.
- Four public sector banks will be tasked with testing India’s central bank digital currency (CBDC) internally.
- In order for its digital currency to become a reality and to be launched with as few errors as possible, the Reserve Bank of India has received advice from various fintech companies on the digital rupee.
Digital assets have taken on great relevance in the world and in international finance, to the point that various countries, companies and institutions have, at least, considered the possibility of trading with them or, failing that, launching their own digital currency to be up to the new times.
One of those countries that seek to be on par with large nations like Russia and China in terms of digital money, is the India, South Asian nation that follows in the footsteps of pro-crypto nations in terms of policies on digital assets, in addition to having already been instructed by several credit institutions and financial companies, in this type of business with the firm intention to develop what will be, a state-owned digital currency (CBDC).
According to what has been pointed out by some officials of the Indian government, said project is sufficiently advanced and it seems that it is nearing completion, so They are currently undergoing a testing period to verify correct operation and, if necessary, make some improvements to the new digital currency from now until the end of 2022, when the launch of Rupee 3.0 is planned.
“There is a pilot project on a CBDC. The RBI could come with the launch this year, when exactly the product will be launched and the specifications must be seen” noted a senior RBI official to Bitcoinnews.
RBI to pilot CBDC
According to two anonymous officials who testified for the outlet, Moneycontrol the State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda, public sector banks, will be responsible for running the pilot internally, at the request of the Reserve Bank of India.
In addition to the support requested from these banking institutions, The Reserve Bank of India wants to ensure that its digital currency project is a reality and with as few errors as possible, which is why it has received advice from several fintech companies on the digital rupee.
Among these companies, the FIS consortium stands out, which has the characteristic of being one of the companies that has provided advice to various central banks precisely on issues related to CBDCs, such as offline and programmable payments, as well as financial inclusion and cross-border CBDC payments. .
In this regard, Julia Demidova, current senior director of FIS, noted last week:
“FIS has had several engagements with the RBI… Our connected ecosystem could be extended to the RBI to experiment with various CBDC options” and I add “Whether it is a wholesale or retail CBDC transaction, our technology can also be extended to commercial banks, where they can test and tokenize central bank money in the form of regulated digital money.”.
What is the digital rupee?
In her Budget 2022 speech, Finance Minister Nirmala Sitharaman announced that the Reserve Bank of India would launch its own digital rupee in the new fiscal year, which will go into circulation in 2022-23, the financial institution said.
While presenting the Budget, Sitharaman explained how the introduction of a CBDC could provide a significant boost to the digital economy.
“Digital currency will also lead to a more efficient and cheaper currency management system,” said.
Thus, the digital rupee will be something very similar to banknotes, but without ATMs. Thanks to this virtual currency, now the citizens of India will have the ability to transfer purchasing power from their deposit accounts, to the wallets of their smartphones in the form of online tokens, which will be in charge of the Reserve Bank of India, just like cash.
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