RBI plans to allow using Central bank Digital Currency (CBDC) in call money market, a senior official said on Tuesday. He also said that India aims to make UPI and other digital products acceptable in a large number of countries. All these products will be showcased during the G20 leadership summit.
CBDC is digital rupee, announced in the FY23 Budget . As on date, two pilot projects – one for CBDC (Retail) and other for CBDC (Wholesale) are going on. “RBI is now planning to go to inter-bank borrowing market, specifically call money market,” a senior official said, adding that the plan is to use CBDCs as tokens for call money settlement. As on date, CBDC-W is being used as pilot in settling trade in government securities market.
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The pilots started in four cities and four banks. These have now been expanded to 13 banks and 26 locations, with nearly 20 lakh million users and merchants on board. The RBI is targeting 10 lakh transactions per day in the retail CBDC segment by December. In July, 20,000-25,000 retail CBDC transactions were done, with August seeing a slight dip on account of banks’ efforts to make the retail CBDC and UPI infrastructure inter-operable.
“Based on the experience gained, different use cases and technical architecture will be tested in future pilots. Features like offline usage to provide resilience and availability in the absence of network and programmability i.e., tying the use of funds to specific use cases are also being considered,” the official said.
Digital Products at G20
Meanwhile, RBI will showcase various digitial initiatives in the financial sector at the exhibition pavilion at the G20 Summit later this week. These include Public Tech Platform (PTP) for Frictionless Credit, CBDC, UPI One World, RuPay On-The-Go, and Bharat Bill Payment System.
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At Public Tech Platform, visitors can experience an interactive demonstration of the entire process i.e., from onboarding to sanction and disbursement of the KCC and dairy loans in an entirely digital manner in a few minutes, revolutionising rural credit. Officials said going forward this platform can be used for distribution of small ticket loans such as MSME, personal loans, etc. Besides, the central bank will showcase an informational video on the RBI’s digital rupee and its journey and there would be live digital rupee transactions demonstrated by select banks which are participating in the pilot.
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UPI One World aims to facilitate the onboarding of visitors to the UPI system, even if they don’t possess a bank account in India. Meanwhile, RuPay On-The-Go empowers customers to conduct contactless payment transactions using everyday accessories such as watches, rings, or keychains, showcasing the versatility of domestic card scheme products on par with their global counterparts.
BBPS (Bharat Bill Payment System) cross-border bill payment will highlight the adaptability of the BBPS platform to integrate with fintechs and conventional financial players to facilitate domestic as well as cross-border payment transactions.