RBI Progresses on CBDC Pilot and Public Tech Platform for Credit

• 21 Oct 2023

Recently, the Reserve Bank of India (RBI) has reported advancements in its Central Bank Digital Currency (CBDC) pilot, with a focus on wholesale and retail CBDC usage.

• Additionally, the public tech platform for credit, launched by the RBI, has seen significant lender response.

Key Points

• Wholesale and Retail CBDC Pilot Progress: The RBI's wholesale CBDC pilot commenced in November 2022, primarily for settlements in the secondary government securities market.
• Retail CBDC pilot, designed for peer-to-peer (P2P) and peer-to-merchant (P2M) transactions, began in December 2022.
• The RBI is working on enhancing the infrastructure to reach the target of 10 lakh (1 million) transactions per day by December 2023.
• The central bank is focused on interoperability and other crucial aspects to boost transaction volumes, with expectations of significant growth from the current rate of 18,000-20,000 daily transactions.
• Objective of CBDC Pilot: The primary goal of the pilot is to study user behavioral patterns, influencing design choices, policy decisions, and incentives.
• This aligns with the objective of facilitating financial transactions while maintaining system integrity.
• Public Tech Platform for Credit: The RBI launched a public tech platform for frictionless credit on August 17, 2023.
• The platform has garnered positive responses from lenders and is expected to enhance cost optimization and speed up loan sanction and disbursement processes.
• Fintech Regulations and Self-Regulatory Organizations (SROs): While fintech regulations are expected to take time to develop, SRO norms are anticipated to be introduced within the year.