CBDC: Programmable, offline CBDC to drive next fintech wave, says NPCI MD

He was speaking at a panel discussion with Jay Kotak, co-head of Kotak811, and MN Srinivasu, co-founder of Bill Desk, at the Mumbai Tech Week on Sunday.

“In the recent monetary policy meeting, the RBI governor announced the programmable money, offline functionality and some of the new initiatives on CBDC… These efforts on CBDCs are going to drive the next wave in my assessment,” Asbe said.

During the monetary policy meeting on February 8, RBI governor Shaktikanta Das proposed new use cases to incorporate programmability and offline functionality in CBDCs. He said the programmability use case of CBDCs will empower entities like government agencies to ensure specific benefits through payments. Companies stand to benefit as well, he said, with the ability to program designated expenses such as business travel for their employees.

Besides, Das said, the proposal to introduce offline functionality in CBDC-Retail aims to facilitate transactions in areas with poor internet connectivity.

Asbe emphasised that while digital money is already efficient, the implementation of tokenisation efforts and delivery versus payment use cases can also significantly boost CBDC adoption in India.

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He said the NPCI is actively exploring the use of the Unified Payments Interface (UPI) for secondary market investments and that the UPI will hopefully be able to help the markets speed up settlements.The NPCI had previously announced the launch of a UPI feature for stock trading in the secondary market, starting from January 1 this year.

Asbe highlighted the vital role of Mumbai in the formation and emergence of the homegrown payments service, saying it would not have been possible to build the UPI if the NPCI were not based in the city.

“I don’t think it would have been possible to build it (UPI) if it was not Mumbai because RBI is based out of Bombay and any such infrastructure requires a marathon effort,” said Asbe. “It requires a physical interaction with the regulators, and with the banks. The UPI design sessions were attended by many fintechs, banks. Most of the other expertise also which is required, like compliance and legal services and everything, was rightly available back in Bombay. So, I believe that this is the right place it could all originate.”

According to the NPCI data, transactions through UPI surpassed the 100-billion mark in 2023, up from 74 billion in 2022.

He was speaking at a panel discussion with Jay Kotak, co-head of Kotak811, and MN Srinivasu, co-founder of Bill Desk, at the Mumbai Tech Week on Sunday.

“In the recent monetary policy meeting, the RBI governor announced the programmable money, offline functionality and some of the new initiatives on CBDC… These efforts on CBDCs are going to drive the next wave in my assessment,” Asbe said.

During the monetary policy meeting on February 8, RBI governor Shaktikanta Das proposed new use cases to incorporate programmability and offline functionality in CBDCs. He said the programmability use case of CBDCs will empower entities like government agencies to ensure specific benefits through payments. Companies stand to benefit as well, he said, with the ability to program designated expenses such as business travel for their employees.

Besides, Das said, the proposal to introduce offline functionality in CBDC-Retail aims to facilitate transactions in areas with poor internet connectivity.

Asbe emphasised that while digital money is already efficient, the implementation of tokenisation efforts and delivery versus payment use cases can also significantly boost CBDC adoption in India.

Discover the stories of your interest

He said the NPCI is actively exploring the use of the Unified Payments Interface (UPI) for secondary market investments and that the UPI will hopefully be able to help the markets speed up settlements.The NPCI had previously announced the launch of a UPI feature for stock trading in the secondary market, starting from January 1 this year.

Asbe highlighted the vital role of Mumbai in the formation and emergence of the homegrown payments service, saying it would not have been possible to build the UPI if the NPCI were not based in the city.

“I don’t think it would have been possible to build it (UPI) if it was not Mumbai because RBI is based out of Bombay and any such infrastructure requires a marathon effort,” said Asbe. “It requires a physical interaction with the regulators, and with the banks. The UPI design sessions were attended by many fintechs, banks. Most of the other expertise also which is required, like compliance and legal services and everything, was rightly available back in Bombay. So, I believe that this is the right place it could all originate.”

According to the NPCI data, transactions through UPI surpassed the 100-billion mark in 2023, up from 74 billion in 2022.