RBI Governor Shaktikanta Das Highlights India’s Progress on CBDCs in Farewell Address: Key Insights

Shaktikanta Das, who assumed office as the 25th Governor of the Reserve Bank of India in December 2018, concluded his six-year tenure this week. In his farewell address, Das praised India's tech-driven advancements in enhancing its financial ecosystem. He highlighted the introduction of the UPI payment system and the advanced trials of the eRupee CBDC as two of the country's most remarkable achievements in recent years.

India is one of the few countries that has swiftly advanced research and development in the field of Central Bank Digital Currencies (CBDCs). This effort, led by the Reserve Bank of India (RBI), has been a source of immense pride for Shaktikanta Das.

“Almost every central bank is talking about CBDCs or they are experimenting, or they are discussing about CBDCs -- but actual launching of a pilot project has been done by very few. The regulatory sandbox around the CBDC is again another area where RBI among other central banks, is a pioneer,” Das said.

A Central Bank Digital Currency (CBDC) is a blockchain-based virtual form of a nation's fiat currency—in India's case, the Indian Rupee (INR). Leveraging blockchain technology, CBDC transactions create an immutable and permanent record, enhancing transparency in financial operations. Additionally, CBDCs have the potential to significantly reduce global reliance on physical paper currency.

In his farewell speech, Das said that CBDCs like the eRupee have huge potential in the coming years.

“Infact, it is the future of currency – a true game changer. I'm sure its benefits will get harnessed fully in the near future and there will be a national level roll out,” he added.

Earlier this year, Das had said that India is looking at the CBDC as a way to internationalise the INR and eventually use it for international settlements. India has reportedly finalised agreements with Sri Lanka, Nepal, and Bhutan to clear settlements using the eRupee.

The government has appointed Sanjay Malhotra as the new RBI Governor, succeeding Shaktikanta Das. Malhotra previously served as the Revenue Secretary in the Ministry of Finance.