RBI Governor Backs CBDC for India’s Payment Revolution

• India is spearheading CBDC development, with continuing trial initiatives.
• CBDC has the potential to alter the future of India’s payment systems and economy.

On his last day as RBI governor, Shaktikanta Das unveiled for India a future of digital finance centered on the central bank digital currency, or CBDC-digital rupee. The RBI governor’s last words on December 10 sounded a personal note of regret but also pointed to progress: six years as head, and more importantly, those six years spent advocating the promotion of fintech innovations in India as well as work begun on building the RBI Innovation Hub at Bengaluru.

Das said that while it is true that most central banks of the world are still searching for what can be done with central bank digital currencies, India has taken significant strides. Even as of now, it has begun its pilot run on the digital rupee, which has positioned India at the cutting edge in global initiatives related to a central bank digital currency. He expressed his confidence that such central bank digital currencies would increasingly remain part of the development process for India’s financial system.

India’s Progressive CBDC Approach

Under Das, it has expanded its cross-border payments infrastructure to enhance quick settlements more than ever before, with attention on partnerships in Asia and in the Middle East. Of course, India is eyeing CBDCs, as the primary method of settlement within its network, which now is already operational in countries such as Sri Lanka, Bhutan, and Nepal.

Das, however, has constantly advocated caution over full-scale rollout and recommended more measured, step-by-step progress. His reasons are the deeper understanding of the effect that CBDC will have on consumers and the overall economy. He says that pilot programs will continue and offer some precious data to gauge the long-term impacts of CBDC.

Looking ahead, it’s hard not to still feel hope about CBDCs really becoming the spine of how payment systems function in countries across the world. Indeed, just as Das is taking off into the sunset, this has become a promising opportunity for India to become a flag-bearer of digital money innovation.

The digital rupee, after all, could be the harbinger of how a nation’s financial landscape turns for years to come.