The Reserve Bank of India (RBI) is in no rush to launch the central bank digital currency (CBDC) nationwide, as its most promising use case — cross-border payments — depends on other countries rolling out their own CBDCs simultaneously for the system to work effectively.
That said, the CBDC pilot is progressing well, with the user base in India expanding to about seven million, said RBI Deputy Governor T Rabi Sankar.
“The basic use case for CBDC eventually comes in the cross-border space, so we have to get into a few cross-border arrangements and see how it works.
"We are in no hurry to launch it nationwide. For this system to work, other countries also need to launch their CBDCs simultaneously.
"For various reasons, things are progressing much better than they were two or three years back.
"But, at this point in time, we have to wait for them to catch up,” Sankar said on the sidelines of the Global Fintech Fest 2025.
“The CBDC pilot is doing well. We are currently focused on creating sufficient use cases, particularly programmable ones.
"At this point, we’re working on making programmable use cases more common.
"The total number of users is now around 7 million,” he added.
According to the RBI’s annual report, as of end-March, the retail CBDC pilot had expanded to 17 banks and 6 million users since its inception in December 2022.
To increase adoption and improve distribution, some non-banks have been allowed to offer CBDC wallets.
The scope of wholesale CBDC has also been broadened with the addition of four standalone primary dealers, the RBI said.
CBDC is a legal tender issued by a central bank in digital form. It is similar to sovereign paper currency but takes a different form, is exchangeable at par with existing currency, and will be accepted as a medium of payment, legal tender, and a safe store of value.
CBDCs appear as liabilities on a central bank’s balance sheet.
The RBI began pilot projects for both retail and wholesale CBDCs in late 2022.
Separately, Sankar, in his address, highlighted that although the benefits of artificial intelligence (AI) are transformative, the technology must be deployed responsibly.
“In finance, the margin for error is even narrower, as financial institutions are built on trust and economies prosper on stability.
"Therefore, integrating AI into financial systems must be treated as a matter of profound responsibility, with due recognition and mitigation of risks,” he said.
Sankar noted that AI can expand financial access, strengthen safeguards, boost efficiency, and improve credit assessment by analysing alternative data and utility payment patterns of unbanked customers.
However, he cautioned that AI systems are trained on vast amounts of data and can absorb the biases inherent in that data.
Systems trained on biased historical data may perpetuate or amplify discrimination in credit profiling or hiring.
Sankar emphasised that the RBI has always fostered innovation with safeguards.
“Through calibrated guidance, supervisory oversight, and structured engagement with industry, the RBI aims to foster an ecosystem where financial innovation flourishes without compromising systemic security.
"As AI reshapes the financial landscape, this approach remains unchanged. Progress and prudence must go hand in hand,” he said.
“While AI holds immense promise, the financial system demands the highest degree of prudence.
"Critical infrastructure and institutions must be ring-fenced from unchecked risks that could arise from untested or poorly governed AI deployments.
"The objective is not to obstruct innovation but to ensure that its applications never compromise the stability or integrity of the system,” Sankar added.paper currency but takes a different form, exchangeable at par with the existing currency and will be accepted as a medium of payment, legal tender and a safe store of value. CBDCs would appear as liability on a central bank’s balance sheet.
The RBI in late 2022 started pilots for both CBDC retail and wholesale.
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