February 9, 2024 at 12:26AM
The Reserve Bank of India announced plans to make its digital currency programmable and capable of offline use. This follows the successful launch of the CBDC retail pilot, enabling various transactions. The new functions will be gradually introduced through pilot programs. The RBI also outlined scenarios for the programmable digital rupee and plans to extend authentication measures. India also aims to tax digital goods, seeking to address tariff revenue loss.
Key takeaways from the meeting notes:
1. The Reserve Bank of India announced plans to make its digital currency programmable and enable offline transactions to address limited internet connectivity in certain regions.
2. The current Central Bank Digital Currency (CBDC) retail pilot in India allows person-to-person and person-to-merchant transactions, and the RBI plans to gradually introduce additional functionalities through more pilot programs.
3. Governor Shaktikanta Das outlined potential use cases for the programmable digital rupee, including government agencies ensuring payments are used for defined benefits and businesses being able to program specified expenditures.
4. The RBI is also planning to establish a principle-based framework for authenticating digital payment transactions and exploring additional options beyond SMS-based OTP.
5. These initiatives are framed as economic development accelerators and aim to bolster India’s digital economy, including efforts to potentially tax digital goods and end a 1998 agreement that prevents such taxation.
Overall, the RBI’s plans for programmable and offline digital currency, as well as efforts to enhance digital payment authentication and potentially tax digital goods, reflect a concerted effort to advance India’s digital economy and address connectivity challenges.