Shaktikanta Das the Governor of the Reserve Bank of India has stated that the central bank will explore offline solutions to boost the adoption of its central bank digital currency (CBDC), the digital rupee, in remote areas of the country with limited internet access.
Several offline solutions, including proximity and non-proximity-based solutions, will be evaluated in hilly, rural and urban environments to achieve this aim, according to the Press Trust of India.
On the programmability front, Das said the CBDC system currently enables person-to-person (P2P) and person-to-merchant (P2M) transactions using digital rupee wallets provided by pilot banks.
The plans for launching offline capabilities were first proposed in March 2023 when Ajay Kumar Choudhary, the RBI’s executive director, said the central bank is looking to test CBDC’s potential for cross-border transactions and linkage with legacy systems in other countries.
While the digital rupee is being tested for offline capabilities, other existing payment platforms — especially the popular Unified Payments Interface (UPI) — already offer offline possibilities. Siddharth Sogani, the CEO of the Indian blockchain analytic firm Crebaco, stated that the primary purpose of CBDCs is to increase money monitoring and eliminate cash from the system.
The RBI launched a pilot of its retail CBDC in December 2022 and achieved the target of having one million daily transactions in December 2023.
Both developing and advanced economies mostly share the motivation behind their CBDC projects: financial stability and cross-border payment efficiency. However, developing countries are also hoping to increase financial inclusion through CBDCs.
