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India explores offline functionality of CBDCs — RBI executive director

In addition to offline functionality, RBI is gauging CBDC’s potential for cross-border transactions and linkage with legacy systems of other countries.

India’s recently launched in-house central bank digital currency (CBDC), the e-rupi, is now being tested for offline functionality, revealed Ajay Kumar Choudhary, Executive Director at the Reserve Bank of India (RBI).

The RBI — India’s central bank and regulatory body — launched the wholesale segment pilot for the digital rupee on Nov. 1, 2022, and onboarded 50,000 users and 5,000 merchants for real-world testing. As of Feb. 25, roughly $134 million (1,100 crore rupees) in 800,000 transactions have been completed via wholesale CBDCs.

Building on this progress, RBI’s Choudhary said that RBI is looking at the CBDC’s offline functionality. Speaking to CNBC-TV18, he stated RBI is gauging CBDC’s potential for cross-border transactions and linkage with legacy systems of other countries. He added:

“We are eagerly looking forward to private sector and fintechs’ participation in CBDC. We will see their contribution, especially on offline and cross-border CBDC transactions.”

Moreover, speaking on behalf of RBI, Choudhary said that CBDC would soon become the medium of exchange and needs all features of physical currency, including anonymity.

India’s motivation for launching CBDC was to improve financial inclusion in the region and spearhead the digital economy. Choudhary also told CNBC-TV18 that CBDC will eventually act as a replacement for cryptocurrencies.

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