The Reserve Bank of India (RBI) Deputy governor T Rabi Sankar today said that the central bank will be shortly conducting pilots for the country's digital currency to be used in the wholesale or retail segment.
"Some progress has been made. We are likely to come out (with pilots) in the near future," says Sankar.
The RBI is currently working towards a phased implementation strategy for digital currency and examining use cases that could be implemented with little or no disruptions.
ALSO READ: Cash Splash
While delivering a keynote address on 'Central Bank Digital Currencies - Is This the Future of Money?', Sankar said a full-scale launch could have an impact on the banking and the monetary system. "The idea is to start off with the models that would have minimal or no impact," he said.
There are some key issues that the RBI is studying like the scope of digital currency (wholesale or retail segments), the underlying technology (distributed ledger or centralised ledger), validation mechanism, distribution architecture (issued by RBI or banks), and degree of anonymity. "These are some of the issues we are looking at very closely," says Sankar.
Also read: Credit growth to industrial sector remained negative during FY21 due to COVID-19 crisis: RBI
The RBI will be shortly conducting pilots in the wholesale or retail segment. "Some progress has been made. We are likely to come out in the near future," says Sankar.
The RBI has been exploring pros and cons of introduction of digital currency for quite some time. The high-level inter-ministerial committee had examined the policy, legal framework, and recommended the launch of digital currency.
After studying the impact of these models, the launch of general-purpose digital currencies on a population scale could be considered by central banks of countries that have implemented specific-purpose digital currency.
Also read: RBI wants to revive growth, anchor inflation expectations: Shaktikanta Das