Global: India Proposes Offline Capable CBDC to Enhance Accessibility

India’s central bank is exploring the development of a digital currency that can function without requiring internet connectivity.

Reserve Bank of India (RBI) Governor Shaktikanta Das emphasized the importance of offline functionality for the central bank digital currency (CBDC) during a Bank for International Settlements summit on Monday. He highlighted that cash’s key feature is its ability to operate offline and expressed the RBI’s commitment to ensuring that the CBDC can be transferred even in offline mode.

Despite global caution surrounding CBDCs, India has been one of the few countries actively experimenting with them. Das revealed that India has conducted pilot programs involving its digital currency, with approximately 1.3 million customers and 300,000 merchants participating. While CBDC usage in India has reached 1 million transactions per day, many individuals still prefer instant mobile payment methods.

India has been testing both wholesale and retail CBDCs, including the use of digital rupees in contactless payments last year. The primary goal of these pilot programs has been to observe changes in consumer behavior concerning bank deposits and to understand the broader economic impact on monetary policy and the banking system.

To mitigate the risk of bank disintermediation, Das highlighted that CBDCs would be non-remunerative and non-interest bearing.

While the RBI advances its CBDC efforts, other countries proceed cautiously. Currently, only Jamaica, the Bahamas, and Nigeria have fully rolled out CBDCs for public use. In the United States, Republican senators, including Ted Cruz and Rick Scott, have introduced legislation to prevent the issuance of a digital dollar without Congressional approval, citing concerns over potential government surveillance.

Privacy concerns also play a significant role in the CBDC discourse in the United Kingdom. The country’s treasury has stressed the importance of user privacy in any legislation related to the development of a digital pound earlier this year.