RBI to launch its first pilot for retail digital Rupee on December 1
Reserve bank of India(RBI) to launch its first pilot for retail digital rupee on December 1.
What is Digital Rupee?
“The Reserve Bank of India(RBI) has defined the e-Rupee as a form of digital token that represents legal tender. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, and unlike cryptocurrencies, the digital Rupee is issued in the same denominations as paper currency and coins.”
The symbol for the digital rupee is- e₹-R. “The e₹-R would offer features of physical cash like trust, safety, and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks,” the Reserve bank of India(RBI) said.
As per the Reserve Bank of India-” The pilot will kickstart in four banks – State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank – in four cities, including Mumbai, New Delhi, Bengaluru, and Bhubaneswar. Four other banks – Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank – will join this pilot eventually and it would also be extended to other cities such as Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.”
“The Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) aims to fulfill the promise of affordable, safer, and easier payments for all. Since it provides a regulated alternative to cryptocurrencies in the market, the CBDC would lead to more robust and reliable payments, lowering the dependency on cash. The underpinning technology would make transaction costs low. Being interoperable with other payment systems, it will complement existing techniques like UPI, thus completing the mobile payments ecosystem,” said Jaya Vaidhyanathan, CEO, of BCT Digital.