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Fintechs seek clarity on digital currency tieups despite RBI blessing

Economic TimesEconomic Times · 1y ago
Fintechs seek clarity on digital currency tieups despite RBI blessing
Medial

The Reserve Bank of India is conducting retail digital currency pilots for non-bank payment system operators (PSOs) with two major use cases being tested, including subsidy payments for farm inputs and corporate expense management. The blockchain-based digital currency allows for programmability of money, enabling usage restrictions to specific merchants. Banks and regulated fintechs are collaborating to develop use cases for central bank digital currency (CBDC), with ongoing weekly meetings with the RBI. Clarity is still needed on operational guidelines and product constructs for PSOs to engage with banks on CBDC integration. Startups are concerned about financial rules and alternative business models for CBDC investments.

RBI Working On Offline CBDCs To Boost Retail Volumes: Governor

Inc42Inc42 · 1y ago
RBI Working On Offline CBDCs To Boost Retail Volumes: Governor
Medial

The Reserve Bank of India (RBI) is working on making its central bank digital currency (CBDC) offline-compatible and introducing value-added services to promote financial inclusion. The Governor of RBI, Shaktikanta Das, stated that they are also looking to connect payment systems like the Unified Payments Interface (UPI) with the CBDC. The CBDC pilot for retail transactions started in December 2022 and achieved the target of 10 lakh (1 million) transactions per day by December 2023. The RBI is also conducting trials for CBDC use in the government securities market and the interbank call money market. Concerns about disintermediation risks to banks have been addressed by making the CBDC non-remunerative and non-interest bearing.

Countries closing in on digital currencies but US lagging, study shows

ReutersReuters · 1y ago
Countries closing in on digital currencies but US lagging, study shows
Medial

A study by the Atlantic Council revealed that 134 countries, representing 98% of the global economy, are exploring digital versions of their currencies. Over half of these countries are in advanced development, pilot, or launch stages. The research highlighted that all G20 countries, except Argentina, are progressing in the development of digital currencies, while the US is falling behind. Despite President Biden's order to explore a digital dollar, progress has been slow, with Federal Reserve chief Jerome Powell stating that a digital dollar is not close to happening. The divergence between central banks on Central Bank Digital Currency (CBDC) development is growing, with China, Europe, and Japan leading the way. The report also highlighted that the risk of the US lagging behind could result in a more fractured international payments system and a potential loss of global finance clout. Currently, 36 pilot projects are underway, including China's e-CNY and the European Central Bank's preparations for the digital euro. The report also mentioned the increasing focus on wholesale CBDCs and outlined 13 cross-border wholesale projects currently in progress. The BRICS member states are at advanced stages of CBDC development, and the report predicts that there will be a further push for alternative payment systems to the US dollar at the upcoming BRICS summit in Russia. It is expected that there will be major CBDC launches by 2027, with China's e-CNY being the largest and most advanced pilot.

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