Indian Central Bank Governor Highlights CBDC’s Role in Economic Growth
On his final day in office, Shaktikanta Das, the governor of the Reserve Bank of India (RBI), discussed the potential impact of India's central bank digital currency (CBDC) Digital Rupee on the economy. He emphasized the need for leveraging new technologies and establishing a regulatory sandbox for fintech innovation. Das highlighted that while global discussions on CBDCs remain tentative, India has made notable advancements.
Das noted that the RBI is a pioneer among central banks, being one of the few to initiate a pilot CBDC project. He expressed confidence in the future of CBDCs within India's economic framework, stating:
“As I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.”
Reports indicate that India is exploring the use of CBDCs as the main settlement mechanism for its payments platform, already operational in Sri Lanka, Bhutan, and Nepal. This initiative aims to expedite cross-border transactions, enhancing trade and remittances.
The RBI is focused on creating a seamless digital payment system for Indian citizens and has partnered with other Asian central banks to facilitate cross-border payment solutions.
India's CEA Calls for Regulatory Transparency on Bitcoin, CBDC, and Other Crypto Assets
V Anantha Nageswaran, India's Chief Economic Advisor (CEA), criticized regulators for hindering innovation in the crypto and gaming sectors during the Global Economic Policy Forum 2024. He stated:
“We should be sure of the criteria we want to set for the regulator to not stand in the way of innovations. The same principle of transparency and social cost benefits that we want to apply to regulated entities and some of their financial innovations should also apply to the regulator themselves.”
Nageswaran asserted that regulators should uphold the same transparency principles expected from the entities they oversee, including sharing information and recognizing the limits of their unelected authority.