The central bank digital currency for the retail customers could be a game-changer and should ensure better monetary transmission, Dinesh Khara, chairman, State Bank of India, said on Friday.
On Thursday, the central bank launched the first phase of the pilot for CBDC- retail with four banks and in four cities. SBI was one of the four banks in the first phase. The pilot covers four cities in a closed user group (CUG) comprising participating customers and merchants.
“RBI’s pilot project on retail-CBDC is a game-changer with durable effects that should ensure better monetary transmission at much lesser costs,” Khara said in a statement.
He further said anonymity of the customer and the transactions are critical for its acceptance.
“The anonymity factor is critical for its acceptance. It collaborates, complements and completes the currency architecture in vogue, while also incubating further innovation,” Khara added.
RBI has created Rs 1.71 crore digital currency for the four participating banks based on their indents. The central bank will be creating more digital rupees as demand from banks comes in over the next few days.
Four more banks will join the pilot later–Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank. The pilot will be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.