Scope of CBDC can be expanded to include settlement of primary G-Sec auctions and Rupee-denominated external debt: SBI Chief

CBDC-wholesale (e₹-W) could be expanded by including settlement of initial auctions of government securities, debt-sector participating FIIs, and mutual funds, among others, according to the State Bank of President India Dinesh Kumar Khara.

Currently, the use case for RBI’s e₹-W pilot, which began on November 1, 2022, is the settlement of secondary market transactions in government securities.

The use of central bank digital currency to settle external debt in rupees, which constitutes 30 percent of India’s external debt, is also conceivable, Khara said at a CBDC event organized by the Association of Indian Banks.

He noted that overseas commercial borrowing payments can also be settled via CBDC later. This currency can also be used to settle trade transactions with Sri Lanka and Bhutan.

Khara said CBDC (digital retail rupee/e₹ -R) salary accounts can be given as an option to those who wish to transact in this currency. Moreover, advance taxes and property taxes can also be envisaged.

RBI launched the first retail digital rupee beta (e₹ -R) on December 1, 2022.