The Reserve Bank of India (RBI) thinks it is able to launch its first digital currency trial programs in December.
There is a timeline for the next phase of India’s CBDC
The RBI has been studying various aspects of a central bank digital currency. Including its security, impact on the Indian financial sector, and how it would affect monetary policy and currency circulation. The bank has also studied the merits of using a centralized or decentralized ledger for its proposed CBDC.
In July, the central bank took its first steps into the idea of a CBDC, and today there was a timeline for the next phase of the project, the governor told CNBC: “I think by the end of the year we should be able to […] be in a position, perhaps, to start our first trials.”
Central Banks are increasing their efforts
Central banks have stepped up efforts to embrace digital currencies over the past year. The reason for this is the decline in the use of cash and growing interest in cryptocurrencies such as Bitcoin and Ethereum.
Currently, China is making the most significant moves and is already testing its digital yuan in several cities, but also Europe and the UK are exploring digital currencies that would be issued by them, either to commercial lenders or directly to the public.
Central bank digital currencies are different from cryptocurrencies such as Bitcoin or Ethereum. A CBDC would be fully regulated and subject to a central authority, typically the central bank. In comparison, cryptocurrencies such as Bitcoin and Ethereum are much harder to regulate and decentralized.