Shaktikanta Das, the governor of the Reserve Bank of India (RBI), has indicated his support for the country’s Central Bank Digital Currency (CBDC). The apex bank governor pointed out the benefits of India’s Digital Rupee with full development.
Das noted that the digital Rupee could eliminate potential certainties and risks associated with crypto assets and their uses.
RBI Governor Backs India’s CBDC
According to a local news report, Reserve Bank of India (RBI) Governor Shaktikanta Das has indicated his unwavering support for the country’s CBDC. Notably, the apex bank governor has long endorsed India’s Digitial Rupee and its possibilities.
The governor outlined the benefits of the CBDC in tackling certainties and risks associated with crypto assets.
According to the RBI governor, India’s Digital Rupee is a more stable and controlled digital currency. He also noted that the CBDC could reduce issues on volatility and other risks associated with crypto assets such as Bitcoin, Ethereum, and others.
Again, the governor indicated the CBDC’s role in cross-border payments and transfers. He acknowledged the importance of digital remittances for most emerging economies, especially for India.
Also, the RBI governor mentioned the need to reduce transaction processing time and related costs for such international transactions. So, he advocated using the CBDC as a potential solution for cross-border transfers.
Das highlighted how CBDCs are potential innovative tools in the financial sector. According to the governor, these assets create a difference by ensuring speedy and efficient international and peer-to-peer (P2P) payments.
Also, he recounted that India runs a 24×7 real-time gross settlement (RTGS) system. So, the country seeks to broaden its settlement system for trade, using prominent global currencies like the British Pound, US Dollar, and Euro.
In addition, the apex bank governor noted that India is currently reviewing its expansion move while considering bilateral or multilateral approaches.
Das stated: “India and a few other economies have already made commerce efforts to expand linkage of cross-border fast payment systems in the bilateral and multilateral modes.“
RBI Governor Highlights India’s Progress With CBDC And Potential AI Risks
Moreover, the RBI governor recounted that India has already launched retail and wholesale CBDCs.
Also, the country is still working on some vital areas and services in its CBDC pilot. These include programmability, interoperability with the UPI retail payment system, and the development of offline solutions for remote places.
Further, Das said that CBDCs offer India the correct platform and leverage to remain prominent in cross-border payments and transfers. He explained the vital role of harmonizing standards and interoperability in using CBDCs for international settlements.
According to the RBI governor, setting the right standard is a major step toward addressing concerns about financial stability associated with cryptocurrencies.
However, the governor highlighted the rising risks from artificial intelligence (AI) within the financial and banking sectors. Das stated that misuse of AI could result in growing cases of cyber-attacks and data breaches.
Therefore, he called on banks and other financial institutions to provide adequate mitigation measures against such risks.
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