India to Trial Retail Digital Currency on December 1st | News Bharat

India will conduct its first retail digital currency trial on Dec. 1 and expand the test a month later to assess the creation and distribution of the e-rupee in the South Asian market with closed groups of customers and merchants, the RBI said on Tuesday. It began evaluating wholesale Partial CBDC.

Four local banks – State Bank of India, ICICI Bank, Yes Bank and IDFC – will be involved in the initial phase of the pilot in four cities (Mumbai, New Delhi, Bengaluru and Bhubaneswar). The RBI said that Baroda Bank, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join the pilot “subsequently”. The pilot will eventually be extended to the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Cochin, Lucknow, Patna and Shimla.

“The scope of the pilot may be gradually expanded as needed to include more banks, users and locations,” it said.

Central bank officials have said in recent quarters that the central bank wants to reduce the economy’s reliance on cash, enable cheaper and smoother international settlements and protect people from the volatility of private cryptocurrencies. Based on the test results, the central bank will experiment with other features and applications of the digital rupee in future pilots, it said.

India’s central bank has been heavily pushing its citizens to avoid crypto transactions for the past few years. Despite the country’s top court ruling, the central bank continues to force banks to participate in cryptocurrency platforms in India, a move that has made on-ramp a nightmare for companies involved, people familiar with the matter said.

The collapse of FTX further wiped out the value of several cryptocurrencies, with Rajeev Chandrasekhar, India’s Minister of State for Electronics and Information Technology, tweeting that due to the government’s “prudent tax and exchange controls,” Indian investors exit cryptocurrencies. Prime Minister Narendra Modi should be thanked “for his foresight, which saved him from this cryptocurrency crash and loss.

In the wake of the uncertainty, the local ecosystem has seen some talent move abroad, with more and more local entrepreneurs building for foreign markets and avoiding serving clients in India, the world’s second-largest internet market.

Top cryptocurrency firms including Coinbase and Polygon, as well as local exchanges CoinDCX, CoinSwitch Kuber and WazirX launched a new industry body this month to foster dialogue among key stakeholders and raise awareness about web3, several The largest local cryptocurrency advocacy group was disbanded a month later.

The limited rollout of the e-rupee comes as several governments around the world are trialing digital versions of their currencies. Singapore’s monetary authority said in late October that it would test a digital version of the local dollar. Central banks in China and the Bahamas are also experimenting in this area. Crypto giant Binance said earlier that the National Bank of Kazakhstan plans to integrate its CBDC on the BNB chain.

But some have expressed concern about the uncontrolled proliferation of digital currencies.

Jeremy Fleming, director of the U.K. Government Communications Headquarters, recently warned that Beijing aims to use a range of technologies, including digital currencies, to control markets and people. He added that Beijing’s efforts to create a central bank digital currency could allow it to monitor transactions for oppressive tactics and, in the future, allow it to evade international sanctions.

“Users will be able to transact with e₹-R through digital wallets provided by participating banks and stored on their phones/devices. Transactions can be person-to-person (P2P) and person-to-merchant (P2M). Payments to merchants can be made using merchant location Shown QR code production. e₹-R will provide the characteristics of physical cash such as trust, security and settlement finality. Like cash, it will not earn any interest and can be converted into other forms of money, just like bank deposits ,” the RBI said in a press release.

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