The Reserve Bank of India (RBI) is in talks with fintech firms and state-controlled banks about a trial of a central bank digital currency (CBDC)local publication Moneycontrol reported on September 5. An unnamed public sector official told the publication that the test could precede the launch of a CBDC by the RBI this fiscal year.
US financial services company FIS was mentioned as one of the fintech companies the RBI is consulting with. FIS Senior Director Julia Demidova confirmed to Moneycontrol that “FIS has had several engagements with the RBI […] and of course our connected ecosystem could extend to the RBI to experience various CBDC options.”
FIS announced the launch of its virtual CBDC lab on August 25. The company was already active in the CBDC space by hosting conferences and panel discussions on the topic.
The Reserve Bank of India is reportedly in talks with public sector banks State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda to participate in the trial. The government owns at least 50% of the shares of these banks.
The Reserve Bank of India (RBI) has long stated that it is looking into the phased implementation of a CBDC, recently saying that an Indian CBDC would be introduced in three stages in 2022 and 2023. Indian Finance Minister Nirmala Sitharaman has spoken favorably of the influence a CBDC would have on the country’s economic growth.
India’s Unified Payments Interface real-time payment system has been portrayed as a competitor to cryptocurrencies and, by nature, to CBDCs. An RBI official also told an IMF conference in June: “We think that central bank digital currencies (CBDCs) might actually be able to kill whatever little case there might be for private cryptocurrencies.” The Reserve Bank of India (RBI) has been deeply suspicious of cryptocurrencies, and while cryptocurrency trading is not illegal in the country, the taxes imposed this year have had a chilling effect on the sector.
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