During the RBI@90 Global Conference, Shri Shaktikanta Das, Governor of the Reserve Bank of India (RBI), shed light on the significant strides India has made in its progress towards a Central Bank Digital Currency (CBDC). Speaking from Bengaluru, the hub of India’s technology revolution, Governor Das underscored the critical role that CBDC plays in shaping the future of the country’s financial ecosystem.
Celebrating the 90th anniversary of the Reserve Bank of India, the conference brought together global experts to discuss the transformative potential of Digital Public Infrastructure (DPI) and emerging technologies. Central to the discussions was India’s pioneering approach to CBDC, which has already seen remarkable progress since the pilot launches in late 2022.
Governor Das highlighted that India’s retail CBDC pilot, which began with payment-focused use cases, now boasts over 5 million users and includes participation from 16 banks. The pilot has since expanded to test both offline functionalities and the programmability of the digital currency, with the latter being heralded as a potential game-changer for financial inclusion. “The programmability feature of CBDC could serve as a key enabler for financial inclusion by ensuring delivery of funds to the targeted user,” Das stated, emphasising the importance of this feature in ensuring that financial resources reach those who need them most.
A standout example from the pilot includes a use case for tenant farmers, who often struggle to access agricultural credit due to the lack of land titles. By programming the digital currency to be used specifically for the purchase of agricultural inputs, the RBI has created a mechanism that offers banks the assurance needed to extend credit, thereby supporting farmers without traditional collateral. This innovation demonstrates how CBDC can be leveraged to solve long-standing challenges in the financial system.
Furthermore, Governor Das revealed another innovative use case where programmable CBDC is being used to disburse funds for the generation of carbon credits, providing a new avenue for environmental sustainability through digital finance. These developments reflect the RBI’s cautious but forward-looking approach to the introduction of CBDC, ensuring that the currency’s rollout is based on a thorough understanding of its impact on users, monetary policy, and the broader financial system.
Governor Das was clear in his message: the RBI is in no rush to roll out CBDC system-wide without first acquiring comprehensive insights from ongoing pilots. “Such understanding would emerge from generation of user data in pilots. Actual introduction of CBDC can be phased in gradually,” he affirmed, highlighting the central bank’s commitment to a measured and data-driven approach.
Looking ahead, Das expressed confidence in CBDC’s potential to underpin future payment systems, both domestically and in cross-border contexts. He also noted the ongoing experiments and discussions in multilateral forums like the G20 to bring greater efficiency to cross-border payments, where CBDC could play a vital role.
The address by Governor Das at the RBI@90 conference not only marked a celebration of the Reserve Bank’s long history but also pointed to a future where digital currency could redefine the financial landscape in India and beyond. As India continues its journey towards a fully digital economy, the RBI’s leadership in the development and implementation of CBDC remains a critical element of this transformation.
