A Vision for the Future: Shaktikanta Das and the Digital Rupee
As Shaktikanta Das wrapped up his tenure as Governor of the Reserve Bank of India (RBI) on December 10, he left behind a bold vision for India’s economic future—one powered by a homegrown central bank digital currency (CBDC), the digital rupee. In his farewell speech, Das shared his excitement about the potential of CBDCs to reshape the Indian economy, positioning the digital rupee as a key driver of financial innovation in the coming years.
Over the last six years, Das has worked tirelessly to integrate emerging technologies into India’s financial infrastructure, including launching the RBI Innovation Hub in Bengaluru and creating a regulatory sandbox to encourage fintech experimentation. But it’s the digital rupee, he believes, that could be the most transformative tool in India’s financial future.
India’s CBDC Progress: A Pioneer Among Central Banks
While many central banks around the world are still in the early stages of discussing or experimenting with CBDCs, Das is confident that the RBI is ahead of the curve. “Among central banks, the RBI is a pioneer,” he said. This is no small claim, as India is one of the few countries to have already launched a pilot project for its CBDC. For Das, the digital rupee isn’t just another tech innovation—it’s a fundamental shift in how India will manage money in the digital age.
Das is particularly excited about the potential of CBDCs to replace paper-based currency altogether, calling it “the future of currency.” With India’s massive population and rapidly growing digital economy, he believes the digital rupee could become the backbone of a more efficient, inclusive, and secure financial system. But this transition will take time, with the digital rupee gradually replacing physical cash as the country’s primary form of money.
India’s Strategic CBDC Adoption: Slow and Steady
Despite his enthusiasm, Das has also been cautious about rushing the full implementation of a CBDC. While he sees the potential for the digital rupee to revolutionize payments both domestically and internationally, he has emphasized the importance of understanding the full implications of this new technology. As he stated, “The actual introduction of CBDC can be phased in gradually,” with careful attention given to its impact on users and India’s broader monetary policy.
In line with this measured approach, the RBI has been conducting pilot projects to gather user data and assess how the CBDC might affect the economy in practice. According to Das, these pilots are crucial for understanding how CBDCs can be used without disrupting existing systems. Only once enough data has been collected will the RBI move forward with a more widespread launch.
Expanding India’s Cross-Border Payments with CBDCs
Beyond domestic use, Das is also eyeing the potential for the digital rupee to play a central role in cross-border payments. In November, the RBI took steps to expand its cross-border payment platform, aiming to include new trading partners in Asia and the Middle East. The platform, which enables instant settlement of payments, is already operational in countries like Sri Lanka, Bhutan, and Nepal.
According to a Bloomberg report, India is exploring the possibility of using CBDCs as the primary settlement mechanism for this payments platform, which could further enhance the efficiency of cross-border transactions. By using a digital currency like the rupee for international payments, India could lower costs and reduce reliance on traditional banking systems, positioning the country as a leader in the future of global payments.
A Digital Future: The Promise of the Digital Rupee
Looking forward, Das remains optimistic about the role CBDCs will play in India’s economic future. He sees the digital rupee as a way to unlock new possibilities in both domestic and international payments, making transactions faster, cheaper, and more secure. As he said in his farewell speech, “CBDC has a huge potential in the coming years… It is the future of currency.”
India’s cautious but steady approach to CBDCs reflects a broader global trend, where central banks are beginning to explore digital currencies but moving slowly to ensure their adoption doesn’t disrupt existing financial systems. With Das’s vision guiding the way, the digital rupee could become a key part of India’s economic future, setting the stage for the country’s financial systems to evolve with the digital age.
As Das transitions out of his role at the RBI, his work on the digital rupee will likely leave a lasting legacy—one that could reshape the future of money in India and beyond.
