India Should Expand Use of RBI Digital Rupee, Sitharaman Says

India’s central bank should explore greater adoption of its wholesale and retail central bank digital currencies, Finance Minister Nirmala Sitharaman said Friday.

“I urge the Reserve Bank of India to further advance and also develop what it has initiated through both the wholesale and retail CBDC pilots,” Sitharaman said in a keynote address at the Global Fintech Fest in Mumbai. The central bank must sense the momentum in such payment systems and “continue to sharpen its capabilities with the digital rupee,” she said.

India may push to expand the use of CBDCs for cross-border payments at the BRICS leaders’ summit in New Delhi this weekend, Bloomberg News reported Thursday. Separately, BRICS finance chiefs and central bank governors said Friday that the bloc will continue exploring ways to make cross-border transactions faster and cheaper, including through greater use of local currencies for trade and investment.

The South Asian nation is seeking to expand use of the digital rupee as it looks to increase adoption of digital payments and broaden the use of central bank money. The RBI has tested retail and wholesale versions since 2022.

CBDCs can help settle transactions faster, Sitharaman said, pointing to India’s first tokenized bond issuance by REC Ltd. earlier this week. “In this entire framework, the monetary settlement was possible due to the presence of CBDC,” she said, calling tokenization the “defining development of our financial architecture.”

Sitharaman also flagged risks from the rapid adoption of artificial intelligence, warning regulators and companies to remain alert. The rise of AI and agentic AI is a “double edged sword” that can help detect fraud faster but also allow attackers to automate larger and more sophisticated cyberattacks, she said.

“Furthermore, the rise of quantum computing means our traditional security and encryption systems must be upgraded before current defenses become obsolete,” Sitharaman said.

Speaking before her at the three-day fintech event, several key officials, including RBI Governor Sanjay Malhotra and his deputy Rohit Jain had flagged vulnerability to the financial system from rapid evolution in technology.

India doesn’t intend to heavily regulate the fintech industry or domestic technology companies, she said, but there is a need for a platform that can engage with foreign governments overseeing the development of frontier technology models.