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The design of digital financial infrastructure: lessons from India

Author

Listed:
  • Derryl D'Silva
  • Zuzana Filkova
  • Frank Packer
  • Siddharth Tiwari

Abstract

Digital finance has the potential to transform emerging market and advanced economies alike. India's approach rests on the principle of providing digital financial infrastructure as a public good. It offers an important case study where the results are relevant and applicable for all economies, irrespective of their stage of development. The provision of a national digital biometric identity to all residents has effectively granted them broad access to the banking system. The development of a real-time payment system platform has brought efficiencies to retail customers and small-scale transactions. By providing cheap and instantaneous payment services to ordinary citizens, the design of the Indian payment system challenges the business case for standalone private payment systems. The establishment of a legal framework for data fiduciaries promises to ensure that individuals can readily access the data generated by their online activity and dictate the circumstances for sharing those data.

Suggested Citation

  • Derryl D'Silva & Zuzana Filkova & Frank Packer & Siddharth Tiwari, 2019. "The design of digital financial infrastructure: lessons from India," BIS Papers, Bank for International Settlements, number 106.
    • Handle: RePEc:bis:bisbps:106
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dr. Robert Oleschak, 2021. "Financial inclusion, technology and their impacts on monetary and fiscal policy: theory and evidence," Working Papers 2021-04, Swiss National Bank.
    2. Prasad, Eswar, 2021. "New Financial Technologies, Sustainable Development, and the International Monetary System," ADBI Working Papers 1277, Asian Development Bank Institute.
    3. Bianchi, Milo & Bouvard, Matthieu & Gomes, Renato & Rhodes, Andrew & Shreeti, Vatsala, 2023. "Mobile payments and interoperability: Insights from the academic literature," Information Economics and Policy, Elsevier, vol. 65(C).
    4. Sally Chen & Tirupam Goel & Han Qiu & Ilhyock Shim, 2022. "CBDCs in emerging market economies," BIS Papers chapters, in: Bank for International Settlements (ed.), CBDCs in emerging market economies, volume 123, pages 1-21, Bank for International Settlements.
    5. Antoine Boirard & Clément Payerols & George Overton & Solène Soares De Albergaria & Lucas Vernet, 2022. "India at the global forefront in digital payments [L’Inde à la pointe des paiements numériques]," Bulletin de la Banque de France, Banque de France, issue 241.
    6. Shalva Mkhatrishvili & Wim Boonstra, 2022. "What we know on Central Bank Digital Currencies (so far)," NBG Working Papers 01/2022, National Bank of Georgia.
    7. Erik Feyen & Jon Frost & Harish Natarajan & Tara Rice, 2021. "What Does Digital Money Mean for Emerging Market and Developing Economies?," Springer Books, in: Raghavendra Rau & Robert Wardrop & Luigi Zingales (ed.), The Palgrave Handbook of Technological Finance, pages 217-241, Springer.
    8. Douglas Arner & Raphael Auer & Jon Frost, 2020. "Stablecoins: potential, risks and regulation," BIS Working Papers 905, Bank for International Settlements.
    9. Surender Kumar & Paramjit Author-Department of Economics, Delhi School of Economics, 2023. "Does Financial Inclusion Enhance Tax Revenue: Indian Experience," Working papers 335, Centre for Development Economics, Delhi School of Economics.
    10. Aurazo, Jose & Gasmi, Farid, 2024. "Digital payment systems in emerging economies: Lessons from Kenya, India, Brazil, and Peru," TSE Working Papers 24-1572, Toulouse School of Economics (TSE).
    11. Siddharth Tiwari & Sharad Sharma & Siddharth Shetty & Frank Packer, 2022. "The design of a data governance system," BIS Papers, Bank for International Settlements, number 124.
    12. Tara Rice & Goetz von Peter & Codruta Boar, 2020. "On the global retreat of correspondent banks," BIS Quarterly Review, Bank for International Settlements, March.
    13. Raphael Auer & Rainer Boehme, 2020. "The technology of retail central bank digital currency," BIS Quarterly Review, Bank for International Settlements, March.
    14. Viviana Alfonso C & Alexandre Tombini & Fabrizio Zampolli, 2020. "Retail payments in Latin America and the Caribbean: present and future," BIS Quarterly Review, Bank for International Settlements, December.
    15. Agustín Carstens & Nandan Nilekani, 2024. "Finternet: the financial system for the future," BIS Working Papers 1178, Bank for International Settlements.
    16. David Leung & Bénédicte Nolens & Douglas Arner & Jon Frost, 2022. "Corporate digital identity: no silver bullet, but a silver lining," BIS Papers, Bank for International Settlements, number 126.
    17. Sally Chen & Derryl D'Silva & Frank Packer & Siddharth Tiwari, 2022. "Virtual banking and beyond," BIS Papers, Bank for International Settlements, number 120.
    18. Alexander Karaivanov & Benoit Mojon & Luiz Awazu Pereira da Silva & Robert M Townsend, 2023. "Digital safety nets: a roadmap," BIS Papers, Bank for International Settlements, number 139.
    19. Morten Linnemann Bech & Jenny Hancock, 2020. "Innovations in payments," BIS Quarterly Review, Bank for International Settlements, March.
    20. Bank for International Settlements, 2020. "The dawn of fintech in Latin America: landscape, prospects and challenges," BIS Papers, Bank for International Settlements, number 112.

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