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Post: Exploring Offline Solutions for CBDC Adoption in India

Exploring Offline Solutions for CBDC Adoption in India

Key Points:

  • The Reserve Bank of India (RBI) plans to explore offline solutions to increase adoption of its central bank digital currency (CBDC), the digital rupee, in areas with limited internet connectivity.
  • Offline solutions, both proximity and non-proximity-based, will be evaluated for implementation in hilly, rural, and urban environments.
  • The current CBDC system allows for person-to-person (P2P) and person-to-merchant (P2M) transactions using digital rupee wallets provided by pilot banks.

Exploring Offline Solutions for CBDC Adoption:

The Reserve Bank of India (RBI) is looking into offline solutions to address the issue of limited internet connectivity in certain areas, particularly hilly, rural, and urban regions. These solutions aim to boost the adoption of the central bank’s digital currency, the digital rupee.

The RBI plans to evaluate various offline options, both proximity-based and non-proximity-based, to enable digital transactions in these areas. By exploring proximity-based solutions, such as utilizing Bluetooth or near-field communication (NFC), users can conduct transactions even without an internet connection. Non-proximity-based solutions can include methods like SMS-based transactions.

Currently, the CBDC system allows for person-to-person (P2P) and person-to-merchant (P2M) transactions using digital rupee wallets provided by pilot banks. These wallets enable users to store and transact with digital rupees. Offline solutions would expand the accessibility and usability of the digital rupee in areas where internet connectivity is limited or unavailable.

Hot Take:

The Reserve Bank of India’s exploration of offline solutions for its central bank digital currency is a significant step toward increasing adoption and accessibility in areas with limited internet connectivity. By providing alternative transaction methods that do not rely on internet access, the digital rupee can reach a wider user base, including those in rural and remote areas. This initiative aligns with the RBI’s goal of promoting financial inclusion and digitalization across the country.

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