JP Morgan Blockchain Head Praises RBI’s CBDC Initiative
The Reserve Bank of India (RBI) is overseeing the creation and distribution of the eRupee CBDC for retail and wholesale payment purposes. The central bank’s approach to exploring the incorporation of the eRupee into the existing financial system has been praised by Naveen Mallela, global co-head of Onyx, the blockchain and digital currency unit of JPMorgan. Speaking on the sidelines of the Global Fintech Fest 2024 held in Mumbai, Mallela lauded the RBI for gradually integrating blockchain into the existing financial system after extensive testing.
“CBDCs are another step in advancing Indian payments. Such an understanding would come from the generation of user data in pilots. The actual introduction of CBDC can be phased in gradually,” Mallela reportedly said on thursday.
A CBDC (Central Bank Digital Currency) like the eRupee is the blockchain representation of fiat currencies, issued and regulated by central banks. While they function like cryptocurrencies in terms of facilitating fast financial transactions, they are regulated by financial authorities. In India, the eRupee entered its trial phase in December 2022. According to recent figures shared by the RBI, the eRupee CBDC has amassed around five million users, as well as the backing of sixteen Indian banks.
Mallela predicted the future of CBDCs and said that cash will become digital in the coming times. CBDCs will then play a crucial role in processing financial transactions while maintaining permanent and immutable logs. This will lead to greater transparency in the country’s finances.
Speaking at the same event, RBI Governor Shaktikanta Das said the CBDC is being programmed in a way that can provide carbon credits to tenants. The interoperability of the CBDC with the UPI system also makes it more usable, he said, adding that the central bank would also help other countries with their respective CBDC initiatives.
Earlier, it was reported that UPI apps like Google Pay and PhonePe have approached the RBI requesting to participate in the eRupee trials.
JP Morgan, meanwhile, is one of the first international banks to explore Web3 technologies. In February 2022, the New York City-based bank announced the launch of Onyx in the metaverse ecosystem called Decentraland. The move was intended to establish that JP Morgan can operate as a bank in the virtual world, just as it does in the real world.
According to reports, the bank recently started trialling immersive training applications for new bank employees, all through the metaverse technology.
The bank has previously predicted that cryptocurrencies will merge with traditional financial systems as governments around the world create laws and regulations to regulate these digital currencies.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
