The Reserve Bank of India (RBI) has reported that as of February 3, 2023, a retail central bank digital currency (CBDC) worth INR 2.73 crore (approximately USD 360,000) is in circulation in India. This marks a significant milestone in India’s journey towards a digital economy, as the country continues to explore the potential of CBDCs to enhance financial inclusion and promote cashless transactions.
The RBI’s retail CBDC is a digital version of the Indian rupee that is issued and backed by the central bank. It is designed to be used by individuals and businesses for everyday transactions, such as buying groceries, paying bills, and sending money to family and friends. The CBDC is stored in a digital wallet that is linked to a user’s mobile phone number, allowing for easy and secure access to funds.
The launch of the retail CBDC in India is part of a broader trend of central banks around the world exploring the potential of digital currencies. While traditional currencies are issued in physical form, CBDCs are entirely digital and offer a range of benefits, such as faster and cheaper transactions, improved transparency and security, and greater financial inclusion.
The RBI has been working on the development of the retail CBDC for several years, conducting extensive research and engaging with stakeholders to understand the potential benefits and risks of digital currencies. The launch of the CBDC in February 2023 represents a significant milestone in this process and paves the way for wider adoption of digital currencies in India.
The RBI has stated that the CBDC is currently being used by a small number of individuals and businesses in select pilot programs, and that further testing and refinement will be required before it is rolled out on a wider scale. However, the central bank is confident that the CBDC has the potential to transform the way Indians conduct their financial transactions and is committed to ensuring that the currency is safe, secure, and accessible to all.
