CBDC will take new shape once private sector finds more use cases, says RBI's Ajay Kumar Choudhary

Once the private sector finds more use cases, the Central Bank Digital Currency (CBDC) will take a new shape, Reserve Bank of India (RBI) Executive Director Ajay Kumar Choudhary said during a conversation at Moneycontrol's inaugural India Fintech Conclave (IFC) on March 7.

The private sector was welcome to innovate and participate in CBDC, Choudhary added. "CBDC will continue to be here, and it will be tested for all use cases," said RBI's ED.

The RBI executive director said pilots for CBDC were going smoothly.

Earlier, RBI deputy governor T Rabi Sankar said that India’s success with Unified Payments Interface (UPI) generated interest among several member countries during the recent G20 meetings. Some even expressed interest in taking advantage of the systems that India had developed.

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CBDC, however, had not featured as prominently in the discussions held so far. “There was not much focus on CBDCs in the meeting. But what I can say is that developed countries’ thinking on CBDCs has changed in the last one year,” the deputy governor said on February 23 on the sidelines of the meeting of deputies of G20 finance ministers and central bank governors in Bengaluru.

CBDC would boost the financial services sector, enable financial inclusion, reduce costs of managing cash and boost innovation in the cross-border payments space, the Economic Survey 2023 said.

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According to the survey, as of July 2022, 105 countries were in the process of exploring CBDC. These countries account for 95 percent of the global GDP. Most of these countries have either launched or piloted CBDC.