Reserve Bank of India Deputy Governor T Rabi Sankar sprang a surprise of sorts recently when he suggested that RBI was in no real rush to launch the central bank digital currency (CBDC). This view indicates a dip in interest in CBDC, ever since Donald Trump took over as US President. One of the first legislations enacted by the Trump administration this year was to stop all work on development of a CBDC in the US, and create a framework for launching stablecoins as an alternative to the official digital currency. In India, the need for an official digital currency in retail payments when we have a vibrant UPI-based ecosystem is debatable. But wholesale CBDC which is used in interbank and very large transactions can be useful in settling external trade in rupees.

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