Local publication Moneycontrol reported on September 5 that the Reserve Bank of India (RBI) is currently in discussions with various fintech companies as well as state-controlled banks regarding a potential trial run of a central bank digital currency (CBDC). The publication quotes an official from a public sector bank who requested anonymity as saying that the trial could come before the launch of a CBDC by the RBI during this fiscal year.
It was mentioned that the financial services company FIS, which is based in the United States, is one of the fintech companies that the RBI is consulting with. Julia Demidova, senior director of FIS, stated in an interview with Moneycontrol that “FIS has had various engagements with the RBI […] and, of course, our connected ecosystem could be extended to the RBI to experiment with various CBDC options.”
On August 25, FIS made the launch that it had begun operating its CBDC Virtual Lab. As the organiser of CBDC-related conferences and roundtable discussions, the company was already heavily involved in the CBDC community.
According to recent reports, the Reserve Bank of India (RBI) is currently engaging in discussions with public sector banks State Bank of India, Punjab National Bank, Union Bank of India, and Bank of Baroda regarding their potential participation in the trial. At least half of the stock in each of those banks is held by the government.
The Reserve Bank of India (RBI) has indicated for some time that it is considering the possibility of rolling out a CBDC in stages. Most recently, the RBI stated that an Indian CBDC would be implemented in three stages between the years 2022 and 2023. The Indian Minister of Finance, Nirmala Sitharaman, has been quoted as having economic things to say about the effect that a CBDC would have on the growth of the Indian economy.
It has been suggested that the real-time payment system that India uses, known as the Unified Payments Interface, is a competitor to cryptocurrencies and, by definition, to CBDCs. In June, a representative from the Reserve Bank of India (RBI) stated at a conference hosted by the International Monetary Fund (IMF) that “we believe that central bank digital currencies (CBDCs) could actually be able to kill whatever little case that could be for private cryptocurrencies.” The Reserve Bank of India (RBI) has a profound mistrust of cryptocurrencies, and despite the fact that buying and selling cryptocurrencies is not against the law in India, the imposition of new taxes in 2018 has stifled the industry.