Reserve Bank of India expands cross-border payments platform
Date: 2024-11-25 Author: Gabriel Deangelo Categories: IN WORLD
To date, India has already entered into agreements with neighboring countries such as Sri Lanka, Bhutan, and Nepal. The immediate plans include the inclusion of the United Arab Emirates (UAE) in the cross-border payments program. A key component of this platform could be the use of central bank digital currencies (CBDC) as the main settlement mechanism.
Currently, CBDC in India is used exclusively for transactions between banks and is not intended for mass use. However, in the future, the Reserve Bank does not rule out the possibility of expanding CBDC to retail consumers, although the specific timing of the implementation of such a system has not yet been determined.
India has long been a leader in the development of central bank digital currencies, along with other BRICS countries such as China and Russia. Research in this area began in 2020, and in 2022, India began pilot testing its CBDC.
In February 2024, RBI Governor Shaktikanta Das noted that developing offline solutions for the digital rupee was a priority, especially for rural areas of the country where internet access remains limited.
In August 2024, it was reported that the number of participants in the digital rupee pilot program had reached 5 million. Despite this, at an international conference on digital infrastructure, Shaktikanta Das emphasized that the Reserve Bank is in no hurry to turn the pilot project into a nationwide system.
Another priority is to ensure interoperability of sovereign CBDCs through a "plug-and-play" system that will simplify integration and improve the efficiency of cross-border transactions.
The development of central bank digital currencies has raised serious concerns among human rights and privacy advocates. The main concerns revolve around the risks of government abuse of control over digital ledgers, which critics say could outweigh the benefits of savings and efficiency. However, India continues to pursue innovative solutions as it seeks to strengthen its role in the global financial system.
