RBI’s CBDC is another step towards accelerating Indian payments, says JPMorgan’s blockchain chief

The Reserve Bank of India (RBI) oversees the creation and distribution of eRupee CBDC for retail and wholesale payments. The central bank’s approach to exploring the integration of eRupee into the existing financial system was praised by Naveen Mallela, global co-head of Onyx, JPMorgan’s blockchain and digital currency unit. Mallela was speaking on the sidelines of the Global Fintech Fest 2024 held in Mumbai, where he praised the RBI for gradually introducing blockchain into the existing financial system after extensive trials.

“CBDC is the next step in the development of Indian payments. Such understanding would come from generating user data in pilots. The actual rollout of CBDC can be done gradually,” Mallela said on Thursday.

CBDC (Central Bank Digital Currency), like eRupee, is a blockchain representation of fiat currencies, issued and regulated by central banks. While they function like cryptocurrencies in terms of facilitating fast financial transactions, they are supervised and controlled by financial authorities. In India, eRupee entered the trial phase in December 2022. As per the latest data shared by the RBI, eRupee CBDC has amassed around five million users, as well as support from sixteen Indian banks.

Foreseeing the future of CBDCs, Mallela stated that in the future, real money will become digital – and this is when CBDCs will play a key role in processing financial transactions while maintaining permanent and immutable records – increasing transparency in the country’s finances.

Speaking at the same event, RBI Governor Shaktikanta Das said that the CBDC is being programmed in a way that it can pass on carbon credits to the lessees. The interoperability of the CBDC with the UPI system also makes it more useful, he said, adding that the central bank will also help other countries in their CBDC initiatives.

It was earlier reported that UPI apps like Google Pay and PhonePe had approached RBI seeking participation in eRupee trials.

Meanwhile, JP Morgan is one of the first international banks to begin exploring Web3 technologies. In February 2022, the New York-based bank announced the launch of Onyx into the metaverse ecosystem called Decentraland, a move aimed at proving that JP Morgan can operate as a bank in the virtual world, just as it does in the real world.

According to reports, in the latest developments, the bank has started testing metaverse-based training applications for new bank employees.

The bank has previously predicted that cryptocurrencies will merge with traditional financial systems as governments around the world create laws and rules to regulate these digital currencies.

(This story has not been edited by NDTV staff and is auto-generated from a feed.)