The Reserve Bank of India (RBI) is set to explore the tokenisation of assets and government bonds as part of its wholesale Central Bank Digital Currency (CBDC) pilot project. The main objective of this initiative is to test the technology rather than generate high transaction volumes. T Rabi Sankar, Deputy Governor of RBI, revealed these plans during the 19th Banking Technology Conference in Mumbai. Sankar emphasized that the focus areas for the CBDC pilot project are the retail side, assessing how systems cope and how people behave. He also mentioned that transaction volumes have decreased from the originally targeted 1 million transactions.
During the event, Sankar shared his thoughts on the impact of new technologies such as Artificial Intelligence (AI) and quantum computing. He highlighted the need to rebuild encryption systems due to the immense data processing capabilities of AI and the potential of quantum computing. Sankar cautioned against the standard response to new technology and urged the banking sector to quickly adapt and develop in order to fully utilize AI without complacency.
Furthermore, Sankar expressed concerns over cybersecurity and stressed the need for banks to update their systems and laws to meet rapidly changing requirements. He acknowledged the need for laws to catch up with the evolving technological landscape.
In conclusion, the RBI is embarking on a wholesale CBDC pilot project that will explore the tokenisation of assets and government bonds. Sankar’s remarks at the Banking Technology Conference emphasized the importance of leveraging new technologies like AI while being mindful of the need for adaptation and cybersecurity measures.
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