- India’s CBDC has attracted 5 million users and 16 banks.
- The RBI is in no rush to launch a full-scale CBDC program yet.
India’s CBDC program has onboarded at least 5 million users and witnesses participation from 16 banks, revealed Shantikanta Das, the Governor of the Reserve Bank of India, the country’s central bank. In his talk on Monday in the Indian city of Bengaluru, Das mentioned the magnitude the program has grown to, but made the RBI’s stance on taking it slow clear.
“It is important to emphasise that there should not be in any rush to roll out system-wide CBDC before one acquires a comprehensive understanding of its impact on users, on monetary policy, on the financial system and on the economy,” Das mentioned. “Actual introduction of CBDC can be phased in gradually.”
The first official mention of a CBDC was made by Finance Minister Nirmala Sitharaman in a budget speech in 2022. The end of that year saw the RBI launching pilot programs for retail and wholesale CBDCs. By 2023’s end, India’s retail CBDC achieved over a million transactions on one specific day.
CBDCs Can Bring Unique Use Cases to the Indian Population
The RBI has also experimented with how this asset can be leveraged since 2023—mainly its offline transactability and programmability. “The programmability feature of CBDC could serve as a key enabler for financial inclusion by ensuring delivery of funds to the targeted user,” Das said in the speech. He elaborated by stating examples of how the programmability of CBDCs can positively impact financially vulnerable populations. The RBI governor spoke of how programmable CBDCs can help farmers build better relationships with banks. Even tenant farmers who do not own lands can submit their identities and prove them using the technology to access financing. The other use case included financial remuneration to farmers for generating carbon credits.
“Other new use cases aimed at testing features such as anonymity and offline availability are proposed to be rolled out gradually.” However, many have argued against CBDCs because of the loss of anonymity due to the control exhibited by governments, as they tout it to be safer alternatives for cryptocurrency.
