Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said the adoption of Central Bank Digital Currency (CBDC), or digital currency, can help in making cross border payments more efficient. India is one of the few countries that has launched CBDC or e-rupee pilots in wholesale and retail segments. “I strongly believe, cross-border payments can be made more efficient through adoption of CBDCs and this is an area which should receive close attention,” the Governor said while addressing the G20 TechSprint Finale organised by RBI and Bank for International Settlements (BIS). He said as all the countries are starting on a clean slate on the CBDC front, the adoption of the right technology platform, which is inter-operable, would be a great benefit to the future of the cross-border payments ecosystem. Das said with its instant settlement feature, CBDCs can play an important role in making cross-border payments cheaper, faster and more secure. The RBI launched pilots for digital rupee in the wholesale in November 2022 and in the retail segment in December 2022. Das said the RBI is slowly and steadily expanding the CBDC pilots to more banks, cities, people and use cases. “The empirical data that we are generating would go a long way in shaping the policies and future course of action,” the Governor said. Under India’s G20 presidency, the fourth edition of G20 TechSprint was launched on May 4, 2023 with the theme ‘Technology solutions for cross-border payments’. Das said one of the priority areas of G20 is the issue of cross border payments. “Notwithstanding the progress made so far, the key challenges to existing cross border payments continue to be high cost, low speed, limited access and insufficient transparency,” he said. Faster, cheaper, more transparent, and more inclusive cross-border payment services would deliver widespread benefits to people and economies worldwide, he said, adding that it would also support economic growth, international trade and financial inclusion. Speaking about the Unified Payments Interface (UPI) – the real-time payment mechanism, he said it has been a game-changer for India’s digital payments ecosystem, which has helped in driving financial inclusion by bringing millions of unbanked individuals into the formal financial system. The UPI transactions crossed the 10 billion mark in August, the data from the National Payments Corporations of India showed. “With over 10 billion transactions a month, the UPI has become the backbone of digital payments in India and has helped to catalyse a wave of innovations in the fintech sector,” Das said. At present, there are more than 70 mobile apps and more than 50 million merchants, who accept UPI payments, he said. Das said the RBI is committed to promoting responsible innovation and has taken several steps such as setting up of the FinTech department and Reserve Bank Innovation Hub (RBIH), and putting in place a Regulatory Sandbox framework. Recently, it also launched a pilot project on a Public Tech Platform for Frictionless Credit in association with RBIH. Through this public end-to-end digital platform, the RBI is enabling lenders to use the information available in multiple places for credit assessment and offer various lending products in a frictionless and speedy manner. It would obviate the need for multiple bilateral integrations of lenders with information providers, Das added. While talking about the G20 TechSprint 2023, the Governor said three problem statements were carefully - reducing illicit finance risk, forex and technology solutions for currency settlement and technology solutions for multilateral cross border CBDC platforms.
