The RBI has already launched CBDC (Central Bank Digital Currency) pilot projects in the wholesale and retail segments last year.
Chaudhary said CBDC is just a digital form of physical currency and will have all of its features.
It is non-remunerative i.e. it bears no interest like any currency, Choudhary noted, adding, “The electronic rupee should also offer physical cash features like security and the settlement of transactions.
Stating that digital currency is intended to complement rather than replace current forms of currency, he said, “it should not be interpreted as a step to replace any of the existing payment bouquets that are already available with us”.
He said the main motivation for exploring CBDC issuance in India, among others, includes shifting to a digital economy, reducing production and operating costs involved in physical cash management, which is enormous even assuming a reduction of 10-15%, promoting financial inclusion. , adding efficiency to the settlement system, driving innovation in a cross-border payment space.
“Supported by India’s state-of-the-art payment system which is affordable and accessible, convenient, efficient, safe and secure, the CBDC can further strengthen the digital economy, make the monetary and payment system more efficient and contribute to more financial inclusion,” he asserted. He also said that for future consideration, offline functionality forms are one of the fundamental considerations for the design of e-Rupee, as it is about a defining characteristic of physical currency.
“As well as ensuring widespread use, offline transactions would be beneficial in remote locations. We are exploring the technical feasibility of the various options available,” he said.
While referring to the launch of the CBDC pilots in the wholesale and retail segments, Choudhary said that the RBI is currently working on a gradual introduction of the CBDC, going step by step through different stages of pilots culminating in a final launch.
The launch of the digital rupee marks a historic milestone in the evolution of currency, he said.
Retail CBDC is a general-purpose, consumer-targeted, freely accessible currency with the characteristics of cash, albeit in digital form, while wholesale CBDC restricts access to a predefined group of users like financial institutions and businesses, he said.
The RBI ED said that during 2022, work on digital currency has gained momentum.
Currently, 115 countries representing 95% of the world’s GDP are exploring digital currency, he said, adding that about 60 countries are in the advanced stage of exploration which is in the development, pilot or launch stage.
Eighteen of the G20 countries are exploring it, of which seven, including India, already have it in the pilot phase, he added.
Another RBI official said CBDC users in the retail segment will reach 50,000 by the end of this month.