The pilot project for central bank digital currency (CBDC) in the Retail Digital Rupee with the Reserve Bank of India (RBI) issuing Rs 1.71 crore to four participating banks based on their indents.
RBI has also selected eight banks for phase-wise participation in this pilot. The first phase will begin with four banks – State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities, Mumbai, New Delhi, Bengaluru and Bhubaneswar. Later, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot and it shall be subsequently extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. The next four banks will join the pilot in the next 2-3 weeks.
“The pilot would cover select locations in closed user group (CUG) comprising participating customers and merchants. The e₹-R 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. It would be distributed through intermediaries, i.e., banks,” the RBI said in a statement.
Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M), the central bank said. Payments to merchants can be made using QR codes displayed at merchant locations.
The currencies were digitally issued to banks and customers will be able to place the request for digital rupee through their digital wallet in their mobile app, which is provided by their banks and the requested amount is credited in their digital rupee wallet. The customers can pay the digital rupee to the individual and their merchants.
RBI issues Retail Digital Rupee:-
The retail pilot project, locations in closed user groups, will be in the form of a digital token that represents legal tender, the RBI had said. The digital rupee is issued in the same denominations that paper currency and coins are issued.
“Along with reducing operational costs associated with physical cash management, it will also enhance settlement efficiency and spur innovation in cross-border payments and offer the public the same uses as any private virtual currency without the risks associated with it,” said Sandeep Ghosh, group country manager, India & South Asia, Visa. He added that Visa looks forward to working with the RBI and industry partners in driving forward the adoption of the Indian e-rupee.
Exactly, one month back on November 1, the RBI launched the pilot for CBDC — wholesale, trading in the secondary market for government bonds.
According to data provided by the Clearing Corporation of India (CCIL), the CBDC bond trades in the first week averaged at Rs 287.5 crore on a daily basis.
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