RBI in talks with 4 banks, fintech for digital currency launch this year

The Reserve Bank of India (RBI) is holding consultations with a clutch of fintech companies and is said to have asked four public sector banks to run a pilot Central Bank Digital Currency (CBDC) project ahead of a possible rollout this financial year.

The list of fintechs include US-based FIS which has been holding roundtable conferences and workshops with central bankers globally on CBDCs.

The fintech company is advising central banks on CBDC topics such as offline payments, programmable payments, new monetary policy toolkit, interest-bearing CBDC, fractional banking issues, financial inclusion, and cross-border CBDC payments, Demidova said.

“FIS has had various engagements with the RBI…and, of course, our connected ecosystem could be extended to the RBI to experiment various CBDC options,” Julia Demidova, senior director at FIS, told Moneycontrol on September 2.

“Whether it is a wholesale or retail CBDC transaction, our technology can also be extended to commercial banks where they can test and tokenise central bank money in the form of digital regulated money,” Demidova added.

CBDC is a currency that is backed by the regulator and stored in a digital format. It can be converted into paper currency and will reflect on the RBI’s balance sheet, thereby granting it legal tender status.