India presses ahead with CBDC pilot run on wholesale business

The Reserve Bank of India (RBI) has revealed further details of its central bank digital currency (CBDC) rollout plans. According to a report by Business Standard, the pilot testing of the digital rupee will kick off as planned in the 2022-2023 fiscal year but will be introduced to wholesale businesses.

Citing sources familiar with the development, the news outlet noted that the CBDC’s design will not allow for the anonymity of the test participants.

“The Reserve Bank of India (RBI) is planning to introduce its Central Bank Digital Currency this fiscal year in a phased manner, initially for use only by wholesale businesses, and is designing it in a way that leaves no room for anonymity by its users,” a source told the news outlet.

The report added that the CBDC will only be introduced to retail segments after the RBI has finished assessing its performance with the wholesale businesses. The central bank also intends to open a consultation on whether to allow anonymous transactions for general use on the CBDC platform at the end of the initial pilot.

Like several other central banks, the RBI has been contemplating the level of privacy its sovereign-backed digital currency should have. In an interview back in April, RBI Deputy Governor T Rabi Sankar said that the digital rupee is likely to allow for “low-value transactions” to remain anonymous.

He added that the RBI had not decided on how to enforce the anonymity—whether by the CBDC design or by additional regulations. However, his statement did not define the threshold of transactions that can be considered low value.

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