India's Central bank may begin its first digital currency trial programs by December, RBI governor Shaktikanta Das said.
The RBI(Reserve Bank of India) is studying matters related to digital currency including its security, impact on the country's financial sector as well as how it would affect monetary policy and currency in circulation, said the governor.
RBI is also exploring the choice between having a centralized ledger for the digital currency or the Blockchain technology.
Well, Central banks including those in China, U.K.and Europe are exploring digital currencies that would be issued by them, dubbed CBDC, either to commercial lenders or to the public directly.
CBDC - central bank digital currencies are legal tender in digital form, and are essentially the online version of their respective fiat currencies. So, for India that would be the digital rupee.
“I think by the end of the year, we should be able to — we would be in a position, perhaps — to start our first trials,” Das told CNBC.
It is worth noting that CBDCs are different from cryptocurrencies like bitcoin and ethereum in several important ways as they would be fully regulated and under a central authority, typically the central banks.
CBDCs would function more like their fiat counterparts, and would have widespread acceptance.
Central banks throughout the globe have stepped up their efforts looking into digital currencies because of a decline in cash usage and the growing interest of people in cryptocurrencies like bitcoin. Among major economies, China is driving the way in the development of a CBDC.
China's digital yuan, or eCNY, has been undergoing real-world trials for several months.
The European Central Bank and the Bank of England are also looking into a digital euro and a U.K. CBDC, respectively.