India’s banking regulator, the Reserve Bank of India’s much-discussed upcoming digital currency, will leverage a private blockchain platform, a report in Mint said.

The report, citing sources, stated that the digital monetary system would resemble cash to give Apex bank firm control. The central bank’s private blockchain system is based on the UPI (Unified Payments Interface) model, which allows public and private sector companies to create their apps. However, the talks are in the early stages and a final decision has yet to be made.

In February of this year, Shaktikanta Das, head of the Reserve Bank of India (RBI) stated that the central bank had reservations about cryptocurrencies like Bitcoin, Litecoin, etc. and was working on its digital currency platform.

However, he added that RBI’s digital currency will be different from other cryptocurrencies. He added that India’s Apex Bank would join the technological revolution that would take advantage of the blockchain platform.

Interestingly, the Central Bank of India launched the idea of ​​a Central Bank Digital Currency (CBDC) in January 2021. Currently, digital money transactions require a processing agency in which the CBDC processes peer-to-peer (P2P) transactions. When the financial firms exchange messages with each other and the final clearing occurs at the RBI level.

Experts said this new P2P system would reduce the role of banks and intermediaries in transactions and allow banking regulators to closely monitor potential financial crimes.

There is no secret that when the RBI creates their system, banks and other financial institutions have to put their applications up above. In January last year, NPCI, the umbrella organization for the operation of payment and settlement systems for private customers, Vajra, launched its blockchain-based platform for the automation of clearing and settlement.

Currently, banking regulators are monitoring global examples of CBDC and are proceeding with caution. That being said, those nations that are considering CBDC will create it on private blockchains. For example, India’s neighbor China is piloting a digital yuan.