A Public Discussion Paper on prospects of open source CBDC (Central Bank Digital Currency) in financial access programs for the underbanked.


Over the last few years, with the increasingly faster policy reforms and technological developments, India has seen an accelerated growth in the digitisation of its economy.

After a tremendous demonetisation and remonetization exercise(2016-18), inexpensive data plans from the telcos, increased smartphone usage, UPIand e-RUPI  services changed the overall payment ecosystem of the economy.

The Indian economy has also noticed a surge of upskilled STEM talent in FOSS lifecycle management, creating a possibility of an open source CBDC for inclusion of the underbanked.

However, this growth story has reached to only 100 million active users largely in the Tier 1 cities, leaving over one billion “Bharatvasis” behind. While demographic factors like age, gender and income are relevant factors that determine the choice, there is compelling evidence that a person’s usage of digital payment methods is influenced by their perception of the instruments, as well as trust in the overall payments framework and banking system in general.

There are visible signs showing that Bharatvasis are ready to move to digital payments provided there are simple and easy-to-use products available in the market.

  • With RBI’s launch of an open source CBDC, India’s burgeoning payments ecosystem can directly benefit from offering consumers a bouquet of digital payments that will not only foster financial inclusivity but also spark off a surge in digital transactions.
  • The coronavirus pandemic response measures required Central Banks across the world to unleash unprecedented fiscal and monetary stimulus. At a national level, the use of CBDC would enable RBI to directly stimulate the economy down to Bharatvasis, through the support of fiscal subsidy transfer – helicopter money.
  • Open source “CBDC” has a potential to act as a low cost medium of exchange for both domestic and cross-border (inward/outward) remittances, e.g for migrant workers. Open source CBDC can make payments cheaper, faster, and more secure.
  • CBDC could provide a way to support different classes of use cases such as multi-signature and co-ownerships, self custody , escrow etc. These cases provide resource management in an efficient manner.
  • CBDC can be based on existing protocols to support interoperability with different distributed ledgers, making it easy for counterparties to reduce risk and provide services across any protocol.
  • Implications of open source CBDC for the Central Bank monetary policy strategy and operating procedures.
  • An open source CBDC could increase the productivity rate at lower income households and small businesses.
  • CBDC could be well designed as interest bearing assets that can be tracked directly from Central Banks,  interest rate adjustments would no longer be constrained by any lower bound in response to economic shocks.
  • As mentioned above “helicopter money”, CBDC eliminates the need for having any kind of inflation buffer.

This paper provides insights, discusses challenges, and provides technology-based recommendations for the Reserve Bank of India(RBI) to launch a CBDC using open source best practices.

Open Research Timeline:

2020/2021Open Research on stable coinsA pilot case study of a use case on social good during Covid emergency in India
2021-Feb 2022Draft V1.0Authors draft a baseline position paper
Feb 2022First Editorial ReviewOn the basis of suggestions from Foundation’s Open Convention
Feb, Mar 2022
Preliminary Public Discussion on Topic with V1.0 Public Discussion and discussion in Open Convention of Foundation
Mar 2022
Draft under Primary Public ReviewGeneral Public Discussion
01/04/22 – 15/04/22April 2022Secondary Editorial ReviewBased on primary public review and suggestions from Foundation’s Open Convention
15/04/22 – 30/04/22
April 2022
Open Source Release
30/04/22 – 01/06/22
May 2022
V2.0 under secondary General Public reviewCC4.0 licensed publication for further General Public Review
01/06/22-15/06/22Jun 2022Tertiary Editorial Reviewbased on Secondary General Public Review and suggestions from Foundation’s Open Convention
16/06/22 – 30/06/22Jun 2022Open Source ReleaseV3.0 

This is a chapter on RBI’s plans for CBDC covering public advisory, suggestions and observations on prospects of India’s Central Bank Digital Currency.

Community Contributors:

Anusha R TungalAshish Sharma, Sourav Deb Roy
Prashant Saxena, Open Bank CWC
Editorial Review By:
Rukesh Patel, Advisory Council



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