On his last day as the governor of the Reserve Bank of India (RBI), Shaktikanta Das shared his vision to transform India’s economy with a home-grown central bank digital currency (CBDC), the digital rupee.
During the farewell speech on Dec. 10, Das highlighted his six-year-long effort to capitalize on new technologies, including setting up the RBI Innovation Hub in Bengaluru and a regulatory sandbox for fintech innovation.
Speaking about India’s progress in CBDC development, Das noted that many central banks worldwide are stuck in initial discussions and experimentation.
On the other hand, he said, “RBI, among the central banks, is a pioneer,” as it is one of the few central banks to launch a pilot CBDC project.
Indian CBDC could permanently replace the paper-based economy
Das expressed optimism about the future of CBDCs in the Indian economy as he left office:
“As I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.”
Related: India amasses 5M central bank digital currency users
In November, the RBI sought to add new trading partners in Asia and the Middle East to expand its cross-border payments platform for instant settlements.
India should not rush to implement a CBDC
A related Bloomberg report suggested that India was exploring the use of CBDCs as its primary settlement mechanism for the payments platform, which is currently operational in Sri Lanka, Bhutan and Nepal.
Previously, Das had advised against implementing a “system-wide CBDC” rollout without understanding the technology’s potential impact on users and India’s monetary policy.
“Such understanding would emerge from the generation of user data in pilots. The actual introduction of CBDC can be phased in gradually,” Das said.
Still, he had expressed confidence in CBDC’s potential to “underpin the payment systems of the future,” both for domestic and cross-border payments.
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