Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar on Thursday said that the central bank would shortly be conducting pilots for the country’s digital currency to be used in wholesale or retail segments. “Some progress has been made. We are likely to come out (with pilots) in the near future,” Mr Sankar said. 

The RBI is currently working towards a phased implementation strategy for digital currency and examining use cases that could be implemented with little or no disruptions. 

While delivering a keynote address on Central Bank Digital Currencies – Is This the Future of Money?, Mr Sankar said that a full-scale launch could have an impact on the banking and the monetary system. “The idea is to start off with the models that would have minimal or no impact,” he added. 

There are some key issues that the RBI is studying like the scope of digital currency (wholesale or retail segments), the underlying technology (distributed ledger or centralised ledger), validation mechanism, distribution architecture (issued by RBI or banks), and degree of anonymity. “These are some of the issues we are looking at very closely,” the RBI deputy governor said.

The RBI has been exploring pros and cons of introduction of digital currency for quite some time. A high-level, inter-ministerial committee had examined the policy, legal framework and recommended the launch of digital currency. 

After studying the impact of these models, the launch of general-purpose digital currencies on a population scale could be considered by central banks of countries that have implemented specific-purpose digital currency.