RBI to make digital currency available offline, says Governor Das

May 6, 2024 

The Reserve Bank of India is working to make its digital currency available without being dependent on internet access, according to Governor Shaktikanta Das.

“One of the key features of cash is that it works offline,” Das said Monday at an event hosted by Bank for International Settlements. “We are working on making the CBDC transferable in the off line mode also.”

India is one of the few economies to experiment with a digital currency backed by a central bank, even as developed nations tread cautiously. The country expanded the use of its digital currency on a pilot basis, with at least 1.3 million customers and 300,000 merchants using it. CBDC usage in India has reached 1 million a day, but people still prefer using instant mobile payments mode, Das said.

“The key objective of the pilots has been a change in consumer behaviour vis-a-vis bank deposits — we need many more transactions to understand its wider economic effects, especially on monetary policy and the banking system,” Das said.

However, by making CBDCs as “non-remunerative” and “non-interest bearing,” any potential risk of bank dis-intermediation has been mitigated, he said, speaking remotely with his counterparts from Germany and Italy — Joachim Nagel and Fabio Panetta — on a panel chaired by BIS head of research Hyun Song Shin.

While CBDCs will help the central bank harness new technologies to make transactions and payments more efficient, risks of data privacy and cybersecurity remain as key hurdles for a full launch.

The RBI is not alone in exercising caution about the new form of currency. US think tank Atlantic Council lists 36 countries that are running pilots on CBDCs while only three — Jamaica, the Bahamas and Nigeria have fully launched digital money to the public.

[Bloomberg]