The Reserve Bank of India (RBI) is delving into the tokenisation of assets and government bonds as part of its wholesale Central Bank Digital Currency (CBDC) pilot project. T Rabi Sankar, Deputy Governor, emphasized that the primary focus is to test the technology rather than generate volumes. The plan includes experimenting with tokenising assets like government bonds, with discussions covering all aspects of the process. Sankar clarified that the goal is not to achieve high transaction volumes but to evaluate how the technology performs. On the retail side, the pilot project assesses the functionality of technologies and user behaviour. Sankar highlighted the decreasing transaction numbers, stating that after targeting 1 million transactions, the count has reduced.
Speaking at the 19th Banking Technology Conference in Mumbai, Sankar addressed the challenges posed by new technologies like Artificial Intelligence (AI) and quantum computing. He emphasized the need to abandon a standard response to these technologies, considering their unique characteristics. Sankar highlighted the transformative impact of AI’s data processing capabilities and suggested that quantum computing might require a complete overhaul of existing encryption systems. While acknowledging that new technology may not always lead to job displacement, he urged the banking sector to adapt swiftly to technological advancements, especially in the realm of AI. Sankar also underlined cybersecurity as a critical concern, suggesting that banks need to reconfigure their systems and adapt to evolving requirements promptly.
