RBI hints at digital foreign money pilot in retail, wholesale segments

The Reserve Bank of India (RBI) has indicated the potential for conducting pilot launch of its digital foreign money in wholesale and retail segments within the close to future.
RBI Deputy Governor T Rabi Sankar mentioned, “Generally, countries have implemented specific purpose CBDCs (central bank digital currencies) in the wholesale and retail segments. Going forward, after studying the impact of these models, launch of general purpose CBDCs shall be evaluated.”
According to him, the RBI is at present working in the direction of a phased implementation technique and analyzing use instances which could possibly be applied with little or no disruption. Some key points underneath examination are: the scope of CBDCs — whether or not they need to be utilized in retail funds or additionally in wholesale funds — and the underlying know-how — whether or not it ought to be a distributed ledger or a centralised ledger, for example, and whether or not the selection of know-how ought to range as per use instances.
It can also be analyzing the validation mechanism — whether or not token primarily based or account primarily based, distribution structure, whether or not direct issuance by the RBI or by means of banks and diploma of anonymity.

“However, conducting pilots in wholesale and retail segments may be a possibility in near future,” Sankar mentioned Thursday at a webinar on digital currencies by Vidhi Centre for Legal Policy Research. Although CBDCs are conceptually no completely different from banknotes, their introduction would require an enabling authorized framework for the reason that present authorized provisions are made protecting in thoughts foreign money in paper kind, he mentioned.