Reserve Bank of India all set to roll out Central Bank Digital Currency in phased manner

Executive Director of RBI, Ajay Kumar Choudhary said RBI will do a phased implementation of the Central Bank Digital Currency (CBDC), both in the retail and wholesale segments. He further added that the necessary amendment to the RBI Act, 1934 has also been made to launch a pilot of CBDC.

Addressing an event organised by the industry body FICCI, Choudhary said with the announcement of the CBDC in the union budget, the necessary amendment in the relevant section was done in the RBI Act, 1934 for the financial regulator to conduct a pilot and subsequently issue CBDC. 

Indian Fintech market stands at third position in the world

Choudhary said, "RBI is also working on phased implementation of a Central Bank Digital Currency in both wholesale and retail segment," and further speaking on the potential of the Indian fintech sector he said that India is the third largest fintech eco-system after US and China. 

"In the next five years, the Indian fintech sector is expected to grow with a cumulative annual growth rate of around 22 per cent. Today, the world is looking up to India, as we continue to innovate and lead the way seamlessly imbibing the new age technology without compromising on the safety and security aspects," he said.

'Important for RBI to identify innovation-related risks and challenges'

While the RBI has taken multiple steps - Regulatory Sandbox, Reserve Bank Innovation hub, to foster innovation in the fintech sector, it's equally important to manage the risks and challenges emanating from innovation. "Sustainability is the most critical aspect in the fintech sector. RBI has constituted a committee to both examine and suggest measures to address the risks and challenges associated with the fintech eco-system while continuing to foster innovation," he said.

The fintech sector will continue to have responsible innovations, which will transform the financial sector, said Choudhary and further asserted, that growth doesn't have to be just swift but inclusive and sustainable.

The RBI ED, Choudhary said it is important to implement responsible innovations which serve the under-privileged, corporate governance; make technological advancements that are scalable and interoperable; giving importance to policy on data privacy, consumer protection, cyber security and prevention of financial crime.

(With inputs from ANI)

 IMAGE: PTI