The Reserve Bank of India (RBI) will introduce the wholesale version of its central bank digital currency (CBDC), the Digital Rupee-Wholesale, in the call money market by October, senior central bank officials said on September 10.
"(It will be) very soon. Interbank borrowing in wholesale CBDC we are going to start this month itself. Either this month or next month. We are testing it. Once we are ready we will be able to start," Ajay Kumar Choudhary, an executive director at the RBI, said on the sidelines of the G20 Leaders' Summit in New Delhi.
The RBI launched the pilot for its wholesale CBDC in November 2022 with a focus on the settlement of secondary market transactions in government securities.
"Use of e₹-W (wholesale CBDC) is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk," the central bank said while announcing the launch of the pilot.
While the RBI is gung-ho about the retail CBDC pilot project and is hoping to hit 1 million daily transactions by the end of 2023 – up from 20,000-25,000 in July – very few transactions have taken place in the secondary market for government securities using the wholesale CBDC.
Choudhary, however, didn't seem perturbed by the lack of activity, calling the use of the wholesale CBDC in the government securities market just "one single piece" of the puzzle.
"Call money (market) is another piece. Unless we integrate all the pieces, it won't be efficient. At this point of time in CBDC we are testing each one of them in isolation. Once we are satisfied with the tech side, the accounting side, and the operational side, then we will integrate it… Our target is not to test the entire thing together," he said.