Shaktikanta Das: The digital rupee has the potential to transform India's economy

Outgoing Reserve Bank of India (RBI) Governor Shaktikanta Das said the phased introduction of the digital rupee could revolutionize the country's economy.

Shaktikanta Das, on his last day as head of the Central Bank of India, spoke about the results of his work and shared his vision for the future transformation of the economy using the digital rupee. Speaking about the progress in the development of the central bank digital currency (CBDC), Das noted that many countries are in the experimentation and discussion phase.

India could conduct a test launch of CBDC to develop the country's digital economy, reduce the cost of physical currency transactions and ensure greater financial inclusion of users. Das said that the digital rupee infrastructure is linked to UPI, a universal payment interface that enables digital rupee transactions through a mobile application.

At the beginning of 2024, India had about 4 million central bank digital currency holders and over 300,000 CBDC acceptance points, according to the RBI. “India is gradually preparing for a CBDC-based economy and the RBI is one of the few central banks to have successfully launched a pilot project.

I see great potential in CBDC as a digital currency that will replace traditional money and become the basis of future payment systems for domestic and cross-border payments," Das said. The RBI governor added that India is exploring the possibility of using the digital rupee as the main instrument for cross-border settlements with Sri Lanka, Bhutan and Nepal.

However, Das advised global financial market participants not to rush into the systematic adoption of CBDC without a clear understanding of the technology's potential impact on users and monetary policy. Shaktikanta Das previously said that a central bank digital currency could mitigate the uncertainty caused by cryptocurrencies.

Author Demuri Goitiev

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