RBI to launch Digital Rupee on December 1: The Reserve Bank will launch the first pilot for retail digital rupee (e₹) on December 1 (Thursday). The pilot, RBI said, will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real time.
Different features and applications of the (e₹) token and architecture will be tested in future pilots, based on the learnings from this pilot.
Retail Digital Rupee launch cities
The Central Bank Digital Currency (CBDC) will launched in Mumbai, New Delhi, Bengaluru and Bhubaneswar on December 1, and later it will be expanded to nine more cities in the initial phase. This follows a month after the RBI had started a pilot in the digital rupee – wholesale segment on November 1.
Retail Digital Rupee launch Banks
The first phase of retail digital rupee will begin with four banks — State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country.
What is Digital Rupee (Central Bank Digital Currency – CBDC)?
CBDC is a digital form of currency notes issued by a central bank. While most central banks across the globe are exploring the issuance of CBDC, the key motivations for its issuance are specific to each country’s unique requirements.
The (e₹) would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. The digital rupee would be distributed through intermediaries (banks). The government of India had announced the launch of the digital rupee from fiscal year 2022-23 onwards in the Union Budget tabled in Parliament on February 1, 2022.
Retail Digital Rupee transactions
The users will be able to transact with (e₹) through a digital wallet offered by the participating banks and stored on mobile phones/devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations.
The (e₹) would offer features of physical cash like trust, safety and settlement finality.
Retail Digital Rupee – More banks to participate
Eight banks have been identified for phase-wise participation in the pilot. After State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank, four more banks — Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank — will join the pilot subsequently.
Retail Digital Rupee – More cities will be added
The other nine cities to which the pilot will be later extended are: Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
Digital Rupee – Concept note
In a recent concept note on Central Bank Digital Currency, the RBI said CBDC is aimed to complement, rather than replace, current forms of money and is envisaged to provide an additional payment avenue to users, not to replace the existing payment systems. Across the globe, more than 60 central banks have expressed interest in CBDCs with a few implementations already under pilot across both retail and wholesale categories and many others are researching, testing, and/or launching their own CBDC framework.
(PTI Inputs)