A long road ahead for the RBI’s digital rupee
The central bank would do well to bring on board more financial institutions and regulators to effectively test the new digital currency.
Why read this story?
Editor's note: After years of debating the utility of digital currencies and cryptocurrency regulation, India is finally on a path to roll out the digital rupee. This marks a significant transformation for the Reserve Bank of India in the way business is done, while a digital currency will open up new opportunities for banks in terms of product innovation, service delivery and risk management. Last week, the RBI launched the first pilot project for the central bank digital currency, or CBDC, in the wholesale segment—also known as e₹-W. The pilot, which targets secondary market transactions in government securities, involves India’s nine top banks. As part of the project, the Clearing Corporation of India Ltd, or CCIL, launched “negotiated dealing system-order matching CBDC”. The platform facilitates instant settlement of trades in government bonds, as opposed to trade settlements on a T+1 basis, which happen a day after the transaction is carried out. “Use of e₹-W is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for …
More in Internet
You may also like
RBI wants IndusInd Bank promoters, the Hindujas, cut to size
After successive controversies and growing unease over promoter influence, the central bank is reshaping the lender—starting with management, moving to its board and tightening the screws on ownership.
What does the RBI’s new rule mean for corporate acquisitions?
Indian banks have been allowed to fund M&As, but the framework will matter as much as the opportunity.
GST Bachat Utsav is a colossal oversell
Beyond marginal savings for consumers, the promises held out by the GST cuts are a tall order. Maybe even delusional.
