The Reserve Bank of India could launch its first digital currency pilot programs by December.
The development was disclosed to CNBC by India’s Central Bank governor, Shaktikanta Das.
According to him, he said, “We are being extremely careful about it because it’s completely a new product, not just for RBI, but globally,”
He said further “I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,”
T Rabi Shankar which is his deputy had earlier announced in July that the apex bank was working toward a “phased implemental strategy” for a digital currency.
According to the governor, the RBI is planning to explore many aspects of a digital currency, which includes its security, influence on India’s financial industry, and how it would affect monetary policy and cash in circulation.
Das went on to say that the central bank is weighing the pros and cons of using a centralized ledger for digital money against using so-called distributed ledger technology (DLT).
A distributed ledger technology (DLT) is a digital database that allows a good number of users to access, share, and record transactions at the same time. The database is owned and managed by a single entity, and in this case, the central bank — in a centralized ledger.
Central bank digital currencies or CBDCs are essentially the online versions of their respective fiat currencies. That would be known as the digital rupee in India’s scenario.
Some central banks including those in Nigeria, China, Europe, and the U.K. are all exploring digital currencies that would be issued by them, either to commercial lenders or to the general public.