Retail digital rupee would have the same face value as paper currency and will be distributed through intermediaries like banks
The Reserve Bank of India (RBI), on Tuesday, said the first pilot for its retail digital rupee (e₹-R) will commence on December 1. It will be in the form of a digital token that represents legal tender, stated the RBI, and would have the same face value as paper currency. The Central Bank will distribute this digital rupee through intermediaries like banks.
The pilot—which will have a phase-wise distribution—follows the RBI’s revelation of a digital rupee concept note on October 7, which revealed that its version of the Central Bank Digital Currency (CBDC) would be of two types, retail and wholesale.
The retail CBDC can be used by all private sector, non-financial consumers, and businesses while wholesale CBDC will have restricted access to select financial institutions.
Bank partners in the pilot
For its first phase, selected banks including State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank will be part of the pilot and e₹-R will be available in four cities, including Mumbai, New Delhi, Bengaluru, and Bhubaneswar. This will later be extended to other cities like Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will also participate in the pilot.
Users can conduct transactions using CBDC through a digital wallet powered by the above-mentioned banks. “Transactions can be both person-to-person and person-to-merchant,” RBI said. Payments to merchants can also be conducted using QR codes displayed in merchant locations.
On November 1, RBI announced its pilot launch for Digital Rupee in the Wholesale segment (e₹-W). Earlier, at the Union Budget, the RBI stated that the implementation of CBDC will improve the digital economy, as per reported by YourStory.
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