Digital Rupee: The Reserve Bank of India (RBI) announced on November 29 that the first retail digital rupee (e-R) pilot will begin on December 1, 2022.
The pilot would cover select locations in a closed user group (CUG) of participating customers and merchants, according to the announcement.
The RBI said that eight banks have been identified for phase-wise participation in this pilot, with the first phase beginning with four banks — State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank — in four cities across the country.
RBI announces the launch of the first pilot for retail digital Rupee (e₹-R) on December 1. 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. pic.twitter.com/Q6GcwZnsWg
— ANI (@ANI) November 29, 2022
Users will be able to transact with e-R via a digital wallet provided by participating banks and stored on mobile phones / devices,” the RBI stated.
“Transactions can be Person to Person (P2P) or Person to Merchant (P2M)” (P2M). Payments to merchants can also be made using QR codes displayed at merchant locations, according to the banking regulator.
According to a media release issued by the central bank, four more banks — Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank — will join this pilot later.
“The pilot would begin in four cities: Mumbai, New Delhi, Bengaluru, and Bhubaneswar, and would later expand to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. As needed, the pilot’s scope may be gradually expanded to include more banks, users, and locations “It stated.
The e-R would have physical cash characteristics such as trust, safety, and settlement finality. As with cash, it will not earn interest and can be converted to other forms of money, such as bank deposits, according to the RBI.