RBI has made a big announcement regarding digital currency digital rupee.
The Reserve Bank of India (RBI) has made a big announcement regarding the digital currency – ‘Digital Rupee’. The Reserve Bank of India has announced the launch of the pilot project of retail digital rupee (e₹-R) on 1 December. The apex bank said on October 31 that the pilot would begin in a month’s time. In the pilot project, the entire process of digital rupee creation, distribution and retail use will be closely examined. There will be changes in the retail digital rupee based on the learnings from this test. Earlier, the RBI had indicated in a press release dated October 31, 2022 that the pilot project of retail digital rupee would start in a month.
RBI said that the pilot project will have a closed group of customers and merchants covering select locations. E-Rupee will be distributed through banks. Its users will be able to buy it through the app provided by the banks and keep it safe in their mobile phones. In this, transactions can be done from person to person and between person and traders. Merchants can be paid using the QR code displayed at the merchant store.
Can convert e₹-R
e₹-R can be converted into other form of money. Eight banks have been selected for this pilot project, but the first phase will start with State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. After this, four more banks including Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot.
Pilot will start in four cities
The pilot will initially cover four cities – Mumbai, New Delhi, Bengaluru and Bhubaneswar and will gradually expand to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. More banks and more cities can be included gradually.
two types of digital currency
There are two types of digital currency – CBDC Wholesale and CBDC Retail. On November 1, the Reserve Bank launched the pilot of wholesale e-Rupee. These are only for large financial institutions including banks, large non-banking finance companies and other large transactional institutions. For this, SBI, BOB, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC were selected.
value of e₹-R
The value of digital currency ie (e₹-R) will also be equal to the existing currency. This will also be accepted like physical currency. With e₹ there will be no need to keep cash in pocket. It will also work like a mobile wallet. There will be no compulsion of bank account to keep it. With this, you will be able to make cashless payment.
Unknown person will not need to share information. Privacy will be maintained. Firstly, the dependence on cash will decrease. The cost of printing physical rupee will come down. It will help in achieving the goal of reducing the cash economy. It will also help in reducing the transaction cost. PLC/GT