The fast-track launch of CBDC announced for 2023 means that the debate in India is no more about whether and when to introduce a CBDC, but the way forward. There are compelling reasons for India to pursue both a retail and wholesale CBDC. It is difficult to predict at the moment whether the bang for the buck will lie in serving a huge untapped domestic market or the potential for cross-border engagement through wholesale CBDCs. The policy brief provides an analysis of strategies adopted by different countries and the design choices that may be advisable for India, based on the existing experience of other countries. It is desirable for India to adopt a gradual, graded approach, contextualised to its financial and monetary system; there is no one size fits all for CBDCs. While the wholesale CBDC may be designed and implemented in co-ordination with an existing multi-CBDC project or a bilateral agreement with a partner country, a retail CBDC should ideally be intermediated in architecture based on a decentralised ledger and account-based identification.
