Reserve Bank of India Unveils the Pilot of its Digital Rupee

Reserve Bank of India Unveils the Pilot of its Digital Rupee

The Apex bank in the country aims to engage nine banks, including top lender State Bank of India, in the pilot. Other potential participants include the Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC.

With the rupee pilot use case, RBI hopes to settle secondary market transactions in government securities. It is worth noting the CBDC, as reported, manifested to enhance the efficiency of the interbank market.

The central bank also aims to unveil the pilot of the retail version of the asset in a month. RBI believes the country can achieve better financial stability with government-backed virtual assets. Further, it asserts that private digital assets, like BTC, pose great risks to the economy owing to their inherent volatility.

Occasioned by this development, India became one of the first major economies to initiate a wholesale CBDC pilot. According to Anita Mishra, MD & Head of Markets & Securities Services, HSBC India, the pilot aids real-time trading and settlement of government securities among the nine banks.

“The aim is to ensure the operational part is fully functional before going deeper into other use cases and Distributed Ledger Technology (DLT), all of which will come with a good time,” Mishra hinted.

Mishra further stated that RBI, during the pilot phase, aims to issue the CBDC to the accounts of participating banks. This, according to her, will be done at regular intervals and on demand.

Prior to the unveiling of this pilot, RBI had earlier issued a detailed report on the inherent potential and risks of its CBDC.

Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.

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