08.09.202213:07 Forex Analysis & Reviews: India moves on to the next phase of CBDC development

India has moved on to the next phase of its CBDC development. The Reserve Bank of India (RBI) asked four state-owned banks to start testing the digital currency as the country prepares for its full launch by the end of 2022.

The decision came despite the fact that the central bank is seeking a ban on cryptocurrency trading in the country, highlighting the difference in perception of CBDC and public cryptocurrencies. According to local media reports, the RBI selected the State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda to carry out the project domestically

The central bank is also said to be in talks with several fintech companies linked to the development of the digital rupee, including US-based Fidelity National Information Services (FIS).

FIS Senior Director Julia Demidova said they are currently advising several central banks on various CBDC-related matters, including offline payments, programmable payments, a new set of monetary policy instruments, interest rate CBDCs, partial banking matters, financial inclusion and cross-border CBDC payments.

The RBI is currently planning to introduce the digital rupee in stages over the current fiscal year ending in March.

India Finance Minister Nirmala Sitharaman previously spoke positively about the prospects for CBDC and how it can facilitate the settlement of large transactions between countries or institutions. In her words, there are distinct advantages to having a digital currency run by a central bank, because these days the massive payments that take place between countries, large transactions between institutions, and large transactions between the central banks of each country themselves are better supported by digital currency.