The Reserve Bank of India (RBI) has advocated a phased approach to CBDC implementation in order to maintain control over the process. News 18 writes about this with reference to the annual report of the regulator.
“The Reserve Bank proposes to take a stepwise approach to CBDC implementation, step by step going through the stages of proof of concept, pilot projects and launch. […] relevant CBDC design elements are being explored that can be implemented with little or no interruption,” the document says.
The RBI noted that it is focusing on identifying the pros and cons of launching a digital rupee. According to the regulator, its design should “conform to the objectives of monetary policy, financial stability and efficient operation of the currency and payment systems.”
The Central Bank also announced the creation of the Innovation Center (RBIH) in order to stimulate innovation. The structure will cooperate with institutions of the financial sector, technological and industry organizations.
As part of its mandate, RBIH will develop an internal infrastructure to promote research in the fintech sector and facilitate interaction with startups.
In early 2021, the Reserve Bank began exploring the potential of the digital rupee. The regulator was interested in the feasibility of launching and the potential of such an instrument.
In July, RBI said it was working on a phased CBDC rollout strategy and launch process for both the wholesale and retail segments.
In November, the regulator admitted that in the first quarter of fiscal 2022 it could conduct a pilot launch of the national digital currency.
Recall that in May 2022, the media learned about the fears of the Reserve Bank of India regarding the possible dollarization of the economy due to cryptocurrencies.
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