India’s Central Bank RBI Tests Asset Tokenization in Wholesale CBDC Pilot in Money Market

RBI pilots asset tokenization in wholesale CBDC, focusing on testing technology rather than volume.
India's Central Bank RBI Tests Asset Tokenization in Wholesale CBDC Pilot in Money Market

A potential component of the ongoing wholesale Central Bank Digital Currency (CBDC) experiment being looked into by the Reserve Bank of India is the tokenization of government bonds and assets. Examining the technology was Mr. T Rabi Sankar’s main priority rather than mass manufacturing.

The speaker mentioned the possibility of tokenizing assets, including government bonds. However, as the purpose of the trial is to just test the technology, we do not anticipate a large amount of business.

From the shop side, the pilot also aims to determine the capabilities of computers, how people use them, and how the technology works. Sankar noted that in comparison to the original goal of one million transactions, the actual transaction volumes had dropped dramatically.

The speaker mentioned that security and encryption systems were under significant pressure to adapt, particularly in terms of adaptability, due to the emergence of new technologies such as artificial intelligence and quantum computing. While job displacement is an urgent concern, Sankar believes that banking will stay up with technological advancements, requiring bankers to embrace and adapt to artificial intelligence.

Adhering to the rapid pace of technological advancement, cyber security remains a critical issue that necessitates modifications to laws and technologies. As Sankar puts it, “the laws will have to catch up with the rapid changes in the landscape.”

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