RBI to launch retail digital rupee on pilot basis

November 30, 2022 Hot from the Oven Valli Sarvani No comments

The Reserve Bank of India (RBI) is all set to launch the first pilot for the digital rupee for retail users from December 1. It announced the launch of Central Bank Digital Currency (CBDC) soon, i.e. from Thursday onwards.

Some select cities and banks will be covered in the first phase of a pilot project. These cities include New Delhi, Mumbai, Bengaluru, and Bhubaneswar.

Both customers and merchants in these will be able to use digital rupee or e-rupee. Later it will be extended to other cities like Hyderabad, Kochi, Ahmedabad, Patna, Indore, Lucknow, Shimla, Guwahati, and Gangtok.

Four banks, i.e. State Bank of India, ICICI Bank, IDFC First Bank, and Yes Bank will involve in the issuance of digital currency. Subsequently, four more banks will involve in the process. They are the Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.

RBI says that the pilot service will be expanded gradually to more locations to reach more users. At the same, more banks will also be joined in the pilot project.

The CBDC is the legal tender issued by RBI. It is a digital currency. Its features are similar to that of paper currency. For instance, the e-rupee can be exchangeable from one individual to another. The only difference between the both is the e-rupee is in digital form.

The digital rupee will be beneficial for retail transactions for all people. Besides, it aims to provide them access to safe money. In other words, people will be able to use it for their financial transactions like cash payments safely.

The digital rupee will be issued in the form of a digital token in the same denominations as paper currency and will be distributed through banks. These banks will allow their customers to use them through a digital wallet.

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