The Reserve Bank of India (RBI) is likely to introduce the pilot of the Central Bank Digital Currency (CBDC) for transactions for the interbank borrowing or call money market by October, said central bank Executive Director Ajay Kumar Choudhary on Sunday.
The pilot for the wholesale Central Bank Digital Currency (CBDC) known as the Digital Rupee-Wholesale (e-W) was launched on November 1, 2022. Initially, its use case was limited to settling secondary market transactions in government securities.
RBI will introduce the wholesale CBDC
“The RBI will introduce the wholesale CBDC in the call market either this month or next month,” Choudhary said on the sidelines of the G20 Leaders’ Summit.
The introduction of the CBDC was announced in the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman. To facilitate this, necessary amendments to the relevant section of the RBI Act, 1934, were made with the passage of the Finance Bill 2022.
RBI selected nine banks for its pilot project
The RBI selected nine banks for its pilot project for wholesale CBDC. These banks are: the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank and HSBC.
Besides, the central bank has already rolled out a pilot in the retail version of the CBDC (e-R) on December 1, 2022. The e-R is in the form of a digital token that represents legal tender.
It is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries like banks. Users can transact with e-R through a digital wallet offered by the participating banks.
The RBI is showcasing various digital initiatives in the financial sector at the exhibition pavilion during the G20 Summit. These include Public Tech Platform (PTP) for Frictionless Credit, CBDC, UPI One World, RuPay On-The-Go and Bharat Bill Payment System.