RBI August Bulletin: Policy Discussions On CBDC Evolved Beyond Initial Concerns

Policy discussions on central bank digital currency have evolved beyond initial concerns and are now focused on more detailed, practical, and operational aspects, the Reserve Bank of India's staff paper said on Monday.

According to results obtained from text mining of central banking news or articles, policy discussions on CBDC have evolved beyond initial concerns about technology and its effects on cash, bank deposits, and monetary policy.

"They now focus on more detailed, practical, and operational aspects, including legal implications, interoperability across jurisdictions, cross-border payments, privacy and pilot projects," the RBI's bulletin for August said and does not necessarily reflect the views of the central bank.

This has come as central banks are increasingly focusing on their payment systems, with CBDC emerging as the most widely discussed financial technology application globally and in India.

The text mining analysis of FinTech news or policy documents showed that due emphasis is given to consumer protection, service delivery, financial inclusion and stressing upon the need to maintain a healthy balance among all the stakeholders.

Apart from the financial technology companies that have already applied for certain technologies such as oT, DLT and Cloud computing, the central banks have put on regulatory discussions towards these specific technologies.

Further, the RBI's recent push to encourage fintechs to establish a Self-Regulating Organisation to ensure best industry practices and standards are in sync may go a long way in delineating regulatory perimeter for the fintechs in India, the staff paper said.