Reserve Bank of India (RBI) Deputy Governor T. Rabi Shankar said on Thursday that the bank is working on a strategy to introduce its own digital currency in a phased manner. The bank is in the process of introducing it on a pilot basis in the wholesale and retail sectors. He said that the thinking about Central Bank Digital Currency (CBCD) has progressed a lot and many central banks of the world are continuously working in this direction.
The deputy governor of the central bank said, “Like other central banks, the Reserve Bank has also been looking into various aspects related to CBCD for a long time.”
He said that in general some countries have implemented CBDCs for specific purposes.
Shankar said, “RBI is working on a strategy to introduce its own digital currency in a phased manner. The central bank’s digital currency can be implemented in such a way that it does not have any impact on the banking system and monetary policy.
“…it may be implemented on a pilot basis in the retail and wholesale sectors in the near future…,” he said.
According to the deputy governor, its implementation would require legal changes as the existing provisions under the Reserve Bank of India Act have been made keeping the currency physical in mind.
According to Shankar, CBDCs need to protect consumers from the frightening volatility seen in digital currencies that do not have any government guarantees. He said that the central banks of various countries are exploring the possibility of CBDC and in some countries work has progressed in this direction.