RBI trying to target interoperability of CBDC with UPI: Dy governor Rabi Sankar

Reserve Bank of India (RBI) deputy governor T. Rabi Sankar

Reserve Bank of India (RBI) deputy governor T Rabi Sankar on July 7 said the central bank is trying to target interoperability of central bank digital currency (CBDC) with unified payment interface (UPI).

“The second thing we are targeting is interoperability with UPI. So anyone with a UPI QR, so that QR can be used if I and merchant have a CBDC, the payment will go to his bank account,” he added.

Sankar was speaking at the Moneycontrol Startup Conclave.

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He further said that some 9 banks have already placed this system and other 3-4 banks are trying that out.

Sankar said the central bank is not particularly interested in rolling it out like for example UPI did at a very large scale because unlike payment instruments, this is money and it is entirely different.

“It has substantial impact on other forms of money like bank deposits, customer behavior, and therefore it has impact on monetary policy and eventually it will feed in to financial stability,” he added.

Last year, the central bank rolled out pilot testing of CBDC in wholesale as well as retail segment.

With both wholesale and retail pilots live in the country, the RBI has joined 17 other central banks including those of China and South Korea whose pilots are underway.

Also read: RBI may bring fintech regulations soon: Dy governor Rabi Sankar

The RBI on November 29 while announcing the pilot said that the implementation will be done in phases in partnership with a few banks and in some cities to start with and the scope will later be scaled up.

The pilot will be implemented among a small group of customers and merchants, starting with the four cities of Mumbai, New Delhi, Bengaluru and Bhubaneswar. It will in the next phase be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

While the retail CBDC was built for customers like individual.

he further during an interaction said we want to go in a measured, calibrated manner, learning along the way.

"So next step we take is to look at the threshold level of customers, we target 1 million customers by June, we have 1.3 million customers now," he added.