The Reserve Bank of India (RBI) has announced the launch of the first retail digital Rupee (e₹-R) pilot on December 1, 2022.
Selected banks for digital rupee Eight banks have been identified for phased participation in this pilot. The first phase will start with four banks State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. Four more banks, namely Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will later join this pilot.
What is Digital Rupee? According to the concept note, the Central Bank Digital Currency (CBDC) is the official form of currency of the Reserve Bank of India. The regulator said that the RBI’s CBDC, also known as the digital rupee or e-rupee, is interchangeable one-to-one at par with fiat currency and is akin to a sovereign currency.
Main features of Digital Rupee 1) A CBDC is a sovereign currency issued by a central bank in accordance with its monetary policy.
2) On the central bank’s balance sheet, it is listed as a liability.
3) All individuals, businesses and government organizations should recognize it as a valid form of payment, legal tender and a safe place to keep money.
4) CBDC is freely convertible into cash and money from commercial banks.
5) Holders of CBDC do not need to have a bank account as it is redeemable phase.
The RBI believes that it is the duty of the central bank to provide its citizens with a risk-free central bank digital currency that protects consumers from the negative social and economic effects of private virtual currencies, CBDCs act as virtual currencies to the public. Will ensure consumer protection while providing benefits.