Wholesale CBDC a major transformation in the way business is done, says Das

RBI Governor Shaktikanta Das. (File photo)

Reserve Bank of India (RBI) Governor Shaktikanta Das On November 2 said that wholesale digital currency is a major transformation in the way business is done.

Speaking at the annual banking conference organised jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks' Association (IBA), the RBI governor said the pilot for wholesale Central bank Digital Currency (CBDC) is a landmark moment in the history of money.

"I think, in that sense also, it's going to be major transformation of the way business is done and the way transactions are conducted. And the RBI is among the few central banks in the world which have taken this initiative," Das said.

The central bank on October 31 launched the first pilot of digital rupee in the wholesale segment and identified nine banks to participate.

The nine lenders include State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC, the RBI said in a release.

According to a statement issued by the central bank, on the use case for the wholesale pilot is a settlement of secondary market transactions in government securities.

The use of e₹-W, or wholesale, is expected to make the inter-bank market more efficient, the RBI said.

On the first day of the digital currency pilot project, bonds worth Rs 275 crore were settled via wholesale CBDC.

Moneycontrol reported that ICICI Bank had on the first day executed its first secondary market transaction in government securities using the RBI's digital currency pilot project. The bank sold government securities maturing in 2027 to IDFC First Bank on the first of the pilot project.

On the retail front, Das said in an event that they do not want to rush pilot of retail CBDC. "We proposed to commence the pilot project for retail shortly," he said.

"Our endeavour is to try and launch CBDC in a full-fledged manner in the near future. In fact, incidentally, the ratail part of CBDC trail will be launched later during this month and we will announce the date separately. But I don't want to give any target date when CBDC will be launched in a full-fledged manner because this is something where we have to proceed very carefully."

The central bank had said the first pilot in Digital Rupee - Retail segment (e₹-R) is planned for launch within a month in select locations in closed user groups comprising customers and merchants, adding that the details regarding operationalisation of such a pilot shall be communicated in due course.