India's central bank, the Reserve Bank of India (RBI), is working on a central bank digital currency (CBDC) that will work offline. This was confirmed by RBI Governor Shaktikanta Das.
CBDC in offline form
On Monday, during an event organized by the Bank for International Settlements (BIS), India's central bank governor Shaktikanta Das described the RBI's progress on a central bank digital currency. The digital rupee, he said, is being developed so that it can function without an Internet connection.
One of the key features of cash is that it works offline… We are working on making CBDC transferable offline as well
– he said.
At the same time, the RBI remains cautious towards cryptocurrencies, seeing them as a potential threat to the country's economic and financial stability. The central bank sees its digital currency as a more stable alternative.
Ongoing digital rupee pilots are ongoing and have already covered over 1.3 million customers and 300,000 merchants. The authorities are analyzing the impact of the project on consumer behavior and the broader financial system.
The main aim of the pilots was to change consumer behavior towards bank deposits – we need many more transactions to understand the wider economic implications, especially for monetary policy and the banking system
Das added.
CBDC controversy
It is worth adding that CBDCs, however, raise concerns among more aware consumers and investors. Attention is drawn to the fact that fiat digital currencies will be able to make it easier for the authorities and services to control citizens. Will this actually be the case?
This last question is difficult to answer clearly. Everything will depend on the selected model. Many believe that China's CBDC is a threat to the privacy of Chinese people. In turn, Joachim Nagel, president of the Deutsche Bundesbank, claims that the European Central Bank “will not be interested” in monitoring payments and spending of CBDC users. The question, of course, is whether he is telling the truth.
For now, it is not known whether Poland is working on a CBDC. The government and the National Bank of Poland have not issued any announcement on this matter.
