In a significant stride towards financial inclusivity, the Reserve Bank of India (RBI) is advancing its central bank digital currency (CBDC) project to facilitate offline transactions, announced RBI Governor Shaktikanta Das during a Bank for International Settlements (BIS) event.
Governor Das underscored the importance of ensuring the digital rupee’s ease of use by enabling offline functionality, akin to traditional cash transactions. By broadening accessibility and replicating the offline nature of cash, the RBI aims to enhance the digital rupee’s appeal across diverse demographics in India.
The move towards offline usability addresses infrastructural challenges, particularly in areas with limited internet access. Recognizing the significance of offline transactions in India’s diverse landscape, the RBI seeks to bridge the gap between digital and physical transactions, fostering wider adoption of the digital rupee.
While advancing its CBDC project, the RBI remains cautious about cryptocurrencies, viewing them as potential threats to economic and financial stability. Unlike decentralized cryptocurrencies, the digital rupee offers a more stable and controlled alternative, aligning with the RBI’s monetary policy objectives.
Pilot projects for the digital rupee have engaged over 1.3 million customers and 300,000 merchants, providing valuable insights into consumer behavior and its impact on the financial ecosystem. Despite initial traction, established mobile payment systems still dominate, indicating a gradual shift in consumer sentiment towards digital currencies.
Governor Das emphasized the need for continued evaluation of the digital rupee’s impact on consumer behavior, monetary policy, and the banking system. As the RBI navigates the evolving landscape of digital currencies, the objective remains clear: to position the CBDC as a secure, viable alternative to both cash and cryptocurrencies, addressing the diverse needs of India’s population.
