Experts believe the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) would catapult the Indian rupee onto the global stage.
As the Reserve Bank of India (RBI) starts its pilot trial of the digital rupee in the wholesale segment (e₹-W) on Friday, experts exuded confidence in the plan and said it would transform India’s cross-border payment facility and catapult the national currency onto the global stage.
RBI deputy governor T. Rabi Sankar recently said the rupee’s internationalisation has both benefits and risks but is an important step towards India becoming a major economic force.
S. Anand, the chief executive officer and co-founder of PaySprint, a fintech company focused on next-gen banking solutions and offers a unified open API platform, said: "CBDC will indeed aid the internationalisation of the Indian rupee. Cost-effective and time-efficient cross-border transactions will bolster the integration of the Indian economy in foreign trade and international capital flows."D
CBDC is the digital form of the country’s fiat currency issued by the central bank.
E-rupee can speed up cross-border payments—an area that will see significant global cooperation and alignment, said Harish Prasad, managing director of banking solutions at FIS, India, a financial technology company. “E-rupee could potentially offer an alternate ‘regulatory compliant’ for value-exchange in the Web 3.0 economy," Prasad said.
RBI’s pilot launch of CBDC comes on the heels of its announcement of the “internationalisation of the rupee” in July this year. “Both are forward-looking steps if India is to establish itself as an economic superpower by 2047," said Saket Dalmia, president of the PHD Chamber of Commerce and Industry, an advisory services organisation for small and medium enterprises.
He said CBDC’s transparent and fast cross-border payments offer the Indian industry, including small companies, an opportunity to achieve their goals faster while supporting economic growth, international trade, and financial inclusion. The "internationalization of the rupee” could help “mitigate the impact of volatile forex markets," said Dalmia.
He added that India’s presidency of G20 (group of 20 major economies) would give a major boost to global efforts to expedite cross-border payments and shape the global priorities and frameworks on CBDCs.