RBI intends to tokenisation assets, bonds as part of the wholesale CBDC pilot.

RBI intends to tokenisation assets, bonds as part of the wholesale CBDC pilot.

T Rabi Sankar, Deputy Governor Reserve Bank of India, said that The Reserve Bank of India (RBI) is planning to introduce tokenisation of assets and government bonds and such under the wholesale CBDC (Central Bank Digital Currency pilot project), with the motive of trying and testing  to try out the technology instead of generating volumes.

Adding further Mr Deputy Governor RBI said that a standard response to new technologies might not be the right approach towards Artificial Intelligence (AI) and quantum computing as the nature of these technologies are very different.

He said that most of the Encryption systems we have today might be rebuilded with technologies such as Quantum Computing and AI and its functionality to process huge data in short time.

T Rabi Sankar Deputy Governor RBI emphasised that introduction of new technology does not always reduces and replaces jobs as much as is generally perceived, and banking won’t cease to exist as money has to be created and other Banking functions will be required as well. It is necessary that bankers must adapt & develop quickly to these technological evolution and not be appeased about AI.

This would help increase retail involvement in the government bond market in addition to expanding the use of digital money beyond the current limited applications for merchant payments.

He also mentioned that the current blockchain ledger that supports CBDC in its current version, Hyperledger Fabric, may be used to build the keep-it-simple systems. Enterprise-scale blockchain systems can be supported by the Linux Foundation's open-source Hyperledger Fabric project.

The banking regulator was looking into use cases for offline payments and feature phone-based payments that would be built on CBDC rails, according to a report published by ET on November 24. The Union's finance minister stated as much on Thursday.

See https://economictimes.indiatimes.com/tech/technology/e-rupee-push-rbi-looks-to-tokenize-government-securities-customer-deposits/articleshow/107154548.cms for additional information.

Moreover Deputy Governor RBI also added that “Things have changed rapidly, laws will have to catch up with it”.

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