RBI Governor Lauds India’s Work on CBDCs in Farewell Address
Shaktikanta Das, who took over as the 25th Governor of the Reserve Bank of India in December 2018, completed his six-year term this week. In his farewell address, Das praised India’s technology-driven progress in improving its financial ecosystem. He highlighted the introduction of the UPI payment system and the advanced testing of the eRupee CBDC as two of the country’s most notable achievements in recent years.
India is one of the few countries that has made rapid progress in research and development in central bank digital currencies (CBDCs). This effort, led by the Reserve Bank of India (RBI), was a source of immense pride for Shaktikanta Das.
“Almost every central bank is talking about CBDCs or they are experimenting or they are discussing CBDCs – but actually launching a pilot project has been done by very few. The regulatory sandbox around the CBDC is yet another area where the RBI, among other central banks, is a pioneer,” Das said.
A central bank digital currency (CBDC) is a blockchain-based virtual form of a country’s fiat currency – in the case of India, the Indian Rupee (INR). Using blockchain technology, CBDC transactions create an immutable and permanent record, increasing transparency in financial transactions. Furthermore, CBDCs have the potential to significantly reduce global dependence on physical paper money.
In his farewell address, Das said CBDCs like eRupee have huge potential in the coming years.
“In fact, it is the future of currency – a real game changer. I am confident that its benefits will be fully realized in the near future and a national-level rollout will take place,” he added.
Earlier this year, Das had said that India is looking at the CBDC as a way to internationalize the INR and ultimately use it for international settlements. India has reportedly signed agreements with Sri Lanka, Nepal and Bhutan to clear settlements using the eRupee.
The government has appointed Sanjay Malhotra as the new RBI governor, succeeding Shaktikanta Das. Malhotra was previously tax secretary in the finance ministry.
