The responsibility for CBDC has been given to the Reserve Bank of India (RBI). Like cryptocurrencies, the use of CBDC integrated into blockchains can speed up online payments without incurring service fees. The number of users will not increase in this test. However, there are plans to add more banks to it. Apart from this, nine more cities will be included in the test. RBI Deputy Governor T Rabi Sankar recently said: “We don’t want to rush the process.” Earlier this month, Reliance Retail CEO V Subramaniam revealed that his company is ready to start using the digital rupee in its stores in Mumbai in partnership with Kotak Mahindra Bank and ICICI Bank.
The digital rupee is likely to make the interbank market more efficient. Apart from SBI, Bank of Baroda, Union Bank of India, ICICI Bank, Kotak Mahindra Bank, HDFC Bank, Yes Bank, IDFC First Bank and HSBC are included in your trial. RBI has started this trial after considering the advantages and disadvantages of CBDC. Previously, RBI had expressed its opposition regarding cryptocurrencies. There has been a rapid growth in UPI payments after the demonetization in the country. The digital rupee can also benefit from this. CBDC is a blockchain-based payment solution, controlled by the Central Bank. It works like cryptocurrencies, but unlike cryptocurrencies, CBDCs have no volatility or other risks.
CBDC will be delivered to users in a digital wallet for testing in the retail segment. This wallet will be compatible with smartphones and PCs. This is likely to reduce the cost of transactions. RBI is among the few central banks in the world that have started the CBDC project.