The Reserve Bank of India may launch its first digital currency pilot program by December, central bank governor Shaktikanta Das told CNBC.
Central banks, including China, Europe, and the United Kingdom Are looking for a digital currency that will be issued directly to commercial lenders or the general public.
They are called Central Bank Digital Currency or CBDC – fiat digital currencies, essentially online versions of their respective fiat currencies. For India, it’s digital rupees.
“We are very cautious because this is a completely new product, not just at RBI but globally,” Das told CNBC’s Tanvir Gill in a pre-recorded interview on Thursday.
According to the governor, RBI is studying various aspects of digital currencies including security, impact on India’s financial sector, and impact on monetary policy and currency.
Das added that central banks want to choose between centralized digital currency ledgers or so-called distributed ledger technology (DLT)…
A DLT is a digital database that allows multiple participants to simultaneously open, share and record transactions. A centralized ledger means that the database is owned and operated by a single entity (in this case, a central bank).
“By the end of this year, I think we should be able to start with the first exam,” Das told CNBC.
His deputy, TRabi Shankar, said last month that the central bank is working on a “step-by-step implementation strategy” for digital currencies.
Growing interest from central banks
Digital Rupee exams can start in December