The Reserve Bank of India (RBI) has announced the launch of a pilot project of Digital Rupee at the retail level.
RBI said on Tuesday that it will bring a pilot project for Retail Central Bank Digital Currency (CBDC) from 1 December. RBI said that the digital rupee will be in the form of a digital token, which will be legal tender. RBI has said that it will launch the first tranche for retail digital rupee (e₹-R) on December 1.
RBI also informed that the digital rupee will be issued in the same denomination in which paper currency and coins are currently issued. That is, the value of the note will be equal to the digital rupee. RBI said that on December 1, this test will be done at selected places in the Closed User Group (CUG). This will include both the customer and the bank merchant.
Transaction through digital wallet
Users will be able to transact with e-R (e₹-R) through digital wallet offered by participating banks and stored on the mobile phone. RBI said that transactions can be both Person to Person (P2P) and Person to Merchant (P2M). At the same time, merchants can be paid using the QR code at the merchant establishments.
These four banks will be involved in this trial of retail use of digital rupee Four banks including State Bank of India and ICICI Bank will be involved. This test will be done in Delhi, Mumbai, Bangalore and Bhubaneswar. The digital rupee will be distributed through banks and users will be able to transact in e-rupee through digital wallets offered by banks participating in the pilot test.
RBI said that this digital rupee will be equipped with the qualities of trust, security and final solution to the holder just like traditional cash currency. Like cash, the holder of digital rupee will not get any interest and it can be used for deposits with banks.
