RBI Grade BNABARD ESISEBI
In one lineMore on this exam
Context:
“RBI MPC Unpacked: Key Theory Meets Today’s Macro Trends”Tap to play · from the C4S channel
The Reserve Bank of India (RBI) has stated it is in no hurry to roll out the Central Bank Digital Currency (CBDC) nationwide for retail users, preferring to observe how other countries implement their digital currencies first. The announcement was made by Deputy Governor Rabi Sankar during the Global Fintech Fest 2025 in Mumbai.
About CBDC (Central Bank Digital Currency)
- CBDC is a digital form of the Indian Rupee, issued and regulated by the Reserve Bank of India.
- It represents legal tender in electronic form, backed by the sovereign, and can be used for payments and settlements just like physical cash.
- It is broadly classified into:
- Retail CBDC (e₹-R): For individual consumers and merchants.
- Wholesale CBDC (e₹-W): For interbank and institutional settlements.
RBI’s Current Stance
- Cautious Approach: RBI will continue with limited pilot testing to study user behaviour, technology reliability, and cybersecurity implications.
- Learning from Others: The Bank intends to observe how other central banks — such as the People’s Bank of China (Digital Yuan) and European Central Bank (Digital Euro) — manage implementation challenges.
- Focus Areas: Interoperability with UPI, offline transactions, scalability, and fraud prevention.
Background
- The CBDC pilot project was launched by RBI in December 2022, beginning with wholesale and retail trials in select cities.
- The RBI has since expanded pilots to include offline payments, programmable transactions, and cross-border settlement testing.
