Date: 18 February, 2024
Let’s Discover how the Reserve Bank of India’s efforts to implement Programmable and Offline CBDC:
Key Points:
- NPCI Managing Director Dilip Asbe predicts RBI’s programmability and offline functionality in CBDC will drive the next fintech wave.
- RBI Governor Shaktikanta Das proposed empowering entities through programmability and facilitating offline transactions in CBDCs.
- Asbe emphasizes the potential for enhanced CBDC adoption with tokenization and delivery versus payment use cases.
- NPCI actively explores UPI for secondary market investments to expedite settlements.
- Mumbai’s crucial role in homegrown payment services is credited to its proximity to RBI and necessary expertise.
- UPI transactions exceeded 100 billion in 2023, a significant increase from 74 billion in 2022, according to NPCI data.
- Collaborative efforts between regulatory initiatives and fintech innovations are expected to shape India’s financial technology future.
Programmable and Offline CBDC
In a recent panel discussion at Mumbai Tech Week, National Payments Corporation of India (NPCI) Managing Director Dilip Asbe asserted that the Reserve Bank of India’s (RBI) efforts to implement programmability and offline functionality in the central bank digital currency (CBDC) will propel the next wave of fintech innovation. Asbe, alongside industry experts Jay Kotak and MN Srinivasu, highlighted the significance of recent announcements by RBI Governor Shaktikanta Das during the monetary policy meeting on February 8.
Governor Das proposed incorporating programmability and offline functionality in CBDCs to empower government agencies and businesses to derive specific benefits through payments. Programmability would allow entities to program designated expenses, such as business travel for employees, while offline functionality aims to facilitate transactions in areas with poor internet connectivity.
Asbe emphasized that while digital money is already efficient, implementing tokenization efforts and delivery versus payment use cases can significantly enhance CBDC adoption in India. The NPCI is actively exploring using the Unified Payments Interface (UPI) for secondary market investments, with aspirations to expedite settlements in financial markets.
Highlighting Mumbai’s pivotal role in the evolution of homegrown payment services, Asbe credited the city’s proximity to the RBI and the necessary expertise. He noted that the UPI launched for stock trading in the secondary market on January 1, 2024, would not have been possible without Mumbai’s infrastructure, facilitating crucial interactions with regulators, banks, and other stakeholders.
NPCI data revealed that UPI transactions surpassed 100 billion in 2023, a significant increase from 74 billion in 2022. As India continues to witness advancements in its digital payments landscape, the collaborative efforts between regulatory initiatives and fintech innovations are anticipated to shape the future of financial technology in the country.
References:
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