Reserve Bank of India to Conduct CBDC Pilot Project With Four State-Run Banks

Fintech Company FIS to Advise on CBDC Pilot

India’s central bank is set to conduct a Central Bank Digital Currency (CBDC) pilot project with four public sector banks with the potential launch toward the end of the year.

According to media reports the Reserve Bank of India will work with State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda to run the pilot, with fintech company FIS advising. FIS is a provider of payment infrastructure solutions which has developed a CBDC virtual lab as part of its RealNet platform used by central banks around the world.

The launch of an Indian CBDC raises questions about its impact on stablecoins and cross-border payments. How the central agencies will regulate stablecoins remains an issue still not addressed by policymakers in India.

“It is too early to confidently forecast the trajectory and endgame for CBDCs and stablecoins, given the multitude of unresolved design factors still in play. For instance, will central banks focus first on retail or wholesale use cases, and emphasize domestic or cross-border applications?” said Raj Kapoor, Founder of India Blockchain Alliance

Regulation and innovation make the impact hard to predict but early efforts to issue CBDCs have been met with only moderate adoption, Kapoor said.

“While it is too early to predict the impact of greater regulation on stablecoins, innovation continues apace with the likely emergence of many more (and newer) varieties in coming years. Coexistence and balance seem to be the future,” Kapoor said.