RBI targets 10 lakh CBDC transactions per day by year-end: Dy Guv Sankar

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Bank of India Deputy Governor T. Rabi Sankar said on Tuesday that the Reserve Bank of India (RBI) is targeting 10,000 CBDC (Central Bank Digital Currency) transactions per day by the end of this year.

This volume of transactions would provide the central bank with enough data points to understand and track digital currency usage, while at the same time it would not be high enough to be achievable, Sankar said at an event organized by the Indian Banks Association (IBA).

Increase ease of use

RBI hopes to achieve this feat by making CBDCs interoperable with the UPI system, thereby increasing usability, accessibility, and use cases.

“We also decided that we would leverage the UPI network to increase transactions in CBDCs. We said there should be interoperability for QR codes,” Sankar said, adding that the process currently involves merchants joining and creating separate QR codes.

“We found that if nothing else, it takes a lot of time, and especially the large merchants had to do a lot of internal processes. So, we decided that CBDC users need not be disrupted from the transaction because the merchant doesn’t own it. At the end of the day, it’s cash. , and it can be transferred into bank deposits. Therefore, we decided to do interoperability.”

Currently, the CBDC-R system processes around 5,000 to 10,000 transactions per day across a user base of 13 clients and 3 merchants.

The 13 banks participating in the retail CBDC pilot have already launched partial UPI interoperability and are expected to fully implement it by the end of July, Sankar said, adding that it will take some time to scale it up to the remaining 20-25 banks. more time.

The facility will include the use of UPI QR codes for CBDC transactions in order to simplify the process for users. Moreover, even if the merchant does not have a CBDC wallet, CBDC payments via UPI will allow E-rupees to be deposited into the merchant’s or recipient’s bank account.

Even with a central bank digital currency introduced as digital money compared to UPI, which is just a payments system, central banks will have to formulate a separate strategy to convince users of the value of using CBDC over UPI, get traction and liquidity into the system, and then expand its use cases, Sankar said.

Speaking of comparisons to cryptocurrencies, he said that CBDC has the features of both currency and bank deposits, and thus there is no doubt as to the nature of the asset, unlike in the case of cryptocurrency, which has no “storeable value”.