As Iran joins the league of cryptocurrency with its own CBDC, will India bite the bullet any soon  | The Financial Express

As Iran joins the league of cryptocurrency with its own CBDC, will India bite the bullet any soon 

Meanwhile, the Central Banks of Hong Kong, Thailand, China, and the United Arab Emirates (UAE) are working with the bank of international settlements (BIS) Innovation Hub to develop a prototype platform, called “mBridge”.

As Iran joins the league of cryptocurrency with its own CBDC, will India bite the bullet any soon 
The report further noted that experts in the country were concerned about businesses' readiness to utilise a CBDC

Last week, Iran joined the league of many other countries, with the launch of its very own central bank digital currency (CBDC) called, ‘crypto rial’. So far many countries have conducted several CBDC experiments with private sector entities as per World Economic Forum (WEF). These include the Bank of Canada’s Project Jasper, the National Bank of Cambodia’s Project Bakong, the Hong Kong Monetary Authority and Bank of Thailand’s  Project Inthanon-LionRock, and the BIS and  Swiss Digital Exchange’s Project Helvetia, among others.

 “CBDC can enhance the efficiency of cross-border payments as well as can provide an alternative to correspondent banks.  The Multiple CBDC (mCBDC) Bridge is a co-creation project that explores the capabilities of distributed ledger technology (DLT) and studies the application of CBDC in enhancing financial infrastructure to support multi-currency cross-border payments,” Sankhanath Bandyopadhyay, economist, and CBDC expert told FE Blockchain.

Meanwhile, the Central Banks of Hong Kong, Thailand, China, and the United Arab Emirates (UAE) are working with the bank of international settlements (BIS) Innovation Hub to develop a prototype platform, called “mBridge”. “CBDCs can potentially enable more real-time and cost-effective globalisation of payment systems. It is conceivable for an Indian importer to pay its American exporter on a real-time basis in digital dollars, without the need of an intermediary,” Vipin Malik, chairman, and mentor, Infomerics Rating, a credit rating agency, said.

As per industry experts, policy creation and regulation of digital currencies require a systemic approach. It is believed that policymakers need to envision a system where stablecoins and retail CBDCs can co-exist along with another payment mechanism. 

In 2021 bureau of Indian standards (BIS) survey of central banks found that 86% of digital assets companies were actively researching the potential of CBDCs, further 60% were seen to be experimenting with the technology and 14% had deployed a pilot project, each.

Meanwhile, back at home, Shaktikanta Das, Governor, Reserve Bank of India (RBI), at the recently, held Global Fintech Festival in Mumbai, said, that the RBI is now actively working towards a phased implementation of Central Bank Digital Currency (CBDC) in both wholesale and retail segments. 

At a time when the cryptocurrency has drawn a lot of flak from the government, this may help in easing a lot of issues, currently faced by the players, “There are many macro-prudential risks associated with its operation and acceptability; henceforth it needs to be implemented in a calibrated and careful manner. The RBI, in its “Report on Trend and Progress of Banking in India 2020-21” has highlighted that many central banks are swiftly moving towards designing their own CBDCs,” Swarup Gupta, financial head, economic intelligence unit, added.

Also Read: KuCoin Labs’ Lou Yu to speak at Token 249 conference on Web3.0-based developments

Follow us on TwitterFacebookLinkedIn

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.