India’s central bank has announced that it will enable non-bank payment system operators to offer central bank digital currency (CBDC) wallets. Noting that “necessary changes will be made to the system to facilitate this,” the Reserve Bank of India (RBI) said the initiative is expected “to enhance access and expand choices available to users.”
Non-Bank Payment System Operators to Offer Digital Rupee Wallets
India’s central bank, the Reserve Bank of India (RBI), issued a “Statement on Developmental and Regulatory Policies” on Friday, which sets out various developmental and regulatory policy measures relating to Indian financial markets, regulations, payment systems, and fintech. It also details the RBI’s plan for the distribution of a central bank digital currency (CBDC) through non-bank payment system operators.
“CBDC pilots in the retail and wholesale segments are underway with more use-cases and more participating banks,” India’s central bank described, adding:
Continuing with this approach, it is proposed to make CBDC-retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets.
“This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions. Necessary changes will be made to the system to facilitate this,” the RBI noted.
The Indian central bank began its digital rupee pilot for the wholesale segment in November 2022, followed by a pilot for the retail segment the following month.
Crypto regulation in India remains undecided. Finance Minister Nirmala Sitharaman said last month that crypto assets cannot be currencies, adding: “We haven’t regulated them even now.” As the host of the G20 last year, India raised the issue of regulating crypto assets with the G20. Sitharaman recently stated that she is “sure there will be some framework emerging.” Earlier this year, RBI Governor Shaktikanta Das cautioned that cryptocurrencies threaten India’s financial stability, the rupee, and the country’s monetary system.