The Indian government does not want to rush into a central bank digital currency (CBDC) pilot despite joining the CBDC race a few months ago.
India’s newly launched CBDC pilot has gathered 50,000 users, and 5,000 merchants since the Reserve Bank of India (RBI) launched the digital rupee pilot last year, local news agency The Economic Times reported on February 8.
Announcing the public milestone of India’s digital currency at a policy press conference, RBI deputy governor Rabi Sankar confirmed that the government plans to proceed with CBDC testing in the smoothest possible way.
“We have targets in terms of users, in terms of merchants. We will go slowly,” said Sankar, noting that the RBI does not want to push the development of CBDC without full awareness of the potential impact. He stated:
“We want the process to happen, but we want the process to happen gradually and slowly. We’re not in a rush to make things happen quickly.”
Sankar noted that the digital rupee pilot project has recorded 770,000 transactions in eight banks since the trial was launched on December 1, 2022. The project is currently underway in five cities, with nine other cities potentially joining the pilot. The official also said that five more banks will join the project in the near future.
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As previously reported, RBI is officially debuting wholesale CBDC in November 2022, launching retail CBDC a month later. The Indian government initially announced its CBDC plans in early 2022, stating that the digital rupee would be a “big boost” to the Indian economy. The RBI then proposed a three-step ranking approach to be rolled out, targeting disruption or absence of disruption in the traditional financial system.
India’s CBDC development comes years after countries like China began aggressively launching digital currencies in April 2020. Despite major efforts to promote CBDC use, some former central bank officials claim that the use of the digital yuan has been low.