India, which is going through a transformation period from a traditional banking system to a digitized economy, is now looking to expand its Central bank digital currency (CBDC) users in months to come. In December 2022, the Reserve Bank of India launched India’s first pilot project of e-rupee, its version of CBDC.
According to reports, around 100,000 users have been involved in the country’s central bank digital currency pilot project. In March, the executive director Ajay Kumar Choudhary said that currently, they have 90000 users. He also added that the Reserve Bank of India is not in hurry to expand its users, the process will be gradual. The reason behind the gradual increase is to make people familiar with the completely new concept of CBDC for Indian people.
Reserve Bank of India piloted both wholesale and retail central bank digital currency pilots simultaneously while the wholesale CBDC was launched on 1 November 2022 and for retail CBDC in December last year. For retail (CBDC-R), launched in four major cities of India, New Delhi, Mumbai, Bhubaneswar, and Bengaluru including four different banks, State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Currently, there are around 15 cities that are participating in CBDC pilots.
In October 2022, the Reserve Bank of India released a comprehensive report on the CBDC adoption and every related query. The report stated that the CBDCs will be freely convertible against commercial bank money and cash. Other Asian countries like China, Thailand, Hong Kong, and the United Arab Emirates are also looking to promote the use of CBDCs.
However, India has not finalized any deal with other countries related to CBDCs, but in its report, the central bank has indicated to collaborate with others in time to come. Reserve Bank of India took the step of CBDC adoption when many technologically advanced countries are struggling to formulate a comprehensive CBDC policy is a right decision. However, it is yet to witness whether it will attract the user as it intended or not in the upcoming months.