India’s central bank plans CBDC launch in 2022 with help from fintechs, public banks India’s central bank plans CBDC launch in 2022 with help from fintechs, public banks
The Reserve Bank of India (RBI) is currently consulting fintech companies and asked four public sector banks to pilot India's CBDC project later this year.
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Updated: Sep. 7, 2022 at 7:02 pm UTC
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The Reserve Bank of India (RBI) is engaged in talks with fintech companies and four public sector banks to pilot Central Bank Digital Currency (CBDC) project, with a potential launch planned later in 2022, Moneycontrolย reported Sept. 5.
Fidelity National Information Services (FIS) is reportedly one of the companies the central bank is consulting. FIS offers banks a central infrastructure payment solutions to build or update their real-time payments systems as well as a CBDC Virtual Lab to support countries to pilot CBDC programs, according to an Aug. 25 news release.
The fintech company is advising central banks on CBDC topics such as offline and programmable payments, money regulations, financial inclusion, and cross-border CBDC payments.
Julia Demidova, senior director at FIS, told Moneycontrol:
โFIS has had various engagements with the RBI…and, of course, our connected ecosystem could be extended to the RBI to experiment various CBDC optionsโ
Full steam ahead for CBDC launch
In a speech on the federal budget in February, Indiaโs finance minister, Nirmala Sitharaman, announced that it will launch a CBDC this year. She claims it will be the digital form of the physical rupee that can be exchanged for one another and will be regulated by the RBI.
Following Sitharaman’s speech, Union Commerce and Industry Minister Piyush Goyal said RBI’s CBDCs will become India’s official and legal tender. He added that the Indian government does not recognize private cryptocurrencies as legal tender, but a 30% crypto tax will be applied if citizens wish to hold the asset. All non-RBI-issued cryptocurrencies, including Bitcoin and Ether, are considered private cryptocurrencies.
In May, the RBI proposed to adopt a “graded approach” to launch India’s CBDC in its annual report 2021-22, stating:
The Reserve Bank proposes to adopt a graded approach to introduction of CBDC, going step by step through stages of proof of concept, pilots and the launch.
On July 18, Sitharaman made further comments on cryptocurrencies on behalf of RBI, expressing concerns about the โdestabilizing effect of cryptocurrencies on the monetary and fiscal stability of a countryโ and said a legislative framework should be implemented in the sector.
โRBI is of the view that cryptocurrencies should be prohibited,โ she added.
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Cynthia Chung
Cynthia is an avid writer who is fascinated by the potential of blockchain tech. She also resonates with Web3 values, especially creative expression and individual autonomy. Since discovering crypto in 2019, she has dedicated her work towards reporting on developments in the blockchain and crypto space.
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