India’s central bank, the Reserve Bank of India (RBI), has revealed that 50,000 users and 5,000 merchants are now using its central bank digital currency (CBDC). Digital rupee transactions are currently handled by eight banks, with five more banks expected to join the pilot soon, RBI Deputy Governor T. Rabi Sankar said.
Digital Rupee now has 50,000 users
Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar said on Wednesday that the central bank’s digital currency pilot project has reached its first milestones.
The RBI official revealed that the Central Bank of India (CBDC) digital currency now has 50,000 users and is accepted by 5,000 merchants. The digital rupee retail pilot, which started on December 1 last year, is taking place in five Indian cities, but the central bank plans to gradually add nine more cities. So far, around 770,000 digital transactions in rupees have been processed by eight banks. The RBI plans to add five more banks to the pilot soon.
The central banker stressed that the Reserve Bank of India intends to proceed cautiously with the digital rupee initiative to avoid taking action without a full understanding of its potential impact.
“We have our targets in terms of users, in terms of merchants. We will go slowly”, he underlined, specifying:
We want the process to happen, but we want the process to happen gradually and slowly. We are in no rush to do something so fast.
India’s largest retailer, Reliance Retail, announced last week that it plans to accept payments in digital rupees. The retail chain has partnered with ICICI Bank, Kotak Mahindra Bank and fintech Innoviti Technologies to add central bank digital currency support to its line of Freshpik gourmet stores across the country.
According to the Atlantic Council’s CBDC tracker, 114 countries, representing over 95% of global GDP, are currently exploring a central bank digital currency.
RBI still skeptical of cryptocurrencies
Meanwhile, India’s central bank continued to recommend a complete ban on cryptocurrencies, including bitcoin and ether. RBI Governor Shaktikanta Das has warned that cryptocurrencies pose a risk to the country’s financial system and will cause the next financial crisis if not banned.
Additionally, the RBI Governor said last month that “cryptocurrency has no underlying value”, warning that “it will undermine the authority of the RBI and lead to the dollarization of the economy”. . Other RBI officials have also warned that crypto could lead to dollarization of part of India’s economy “which will be against the country’s sovereign interest.”
What do you think of the progress of the digital rupee pilot project? Let us know in the comments section below.
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