Working Paper No.: WP 138 A Central Bank Digital

Page | 6 A third rationale sometimes heard for CBDC issuance is to enable the central bank and the government to retain control of the payments system in the face of stablecoins and other private payment rails. [...] To start, it may take a year for the RBI to form and make available an analysis of the rationale, impact, scope, design and the pace of the launch first of its CDDC pilots and then the digital currency itself. [...] It will need to assess the readiness of the banks, other financial intermediaries, and the public to use that digital currency; its impact on the conduct of monetary policy and its transmission; and its implications for capital flows, the exchange rate, and the composition and management of foreign reserves, if any. [...] In the Indian context it will be important to analyze the benefits and challenges of CBDC availability for population groups with different levels of literacy, access to the hardware, and internet connectivity, and to adjust design and rollout strategies in light of this analysis. [...] He cautioned that the success of CBDCs will be dependent on the inclusion of the lower socio-economic groups in the country; and that likely a phased roll out would be required (first at the wholesale level and then at the retail level; and in further phases even in retail level).