Reserve Bank Digital Rupee; It will be introduced on December 1 on a pilot basis

The first pilot of the retail digital currency in India will begin on December 1, the Reserve Bank has announced. The study extends the manufacturing and distribution of e-Rupee to a closed group of consumers and merchants in the South Asian market. The RBI’s current retail trial of the digital currency comes a month after a pilot study was launched in the wholesale segment.

Four banks namely State Bank of India, ICICI Bank, Yes Bank and IDFC Bank will participate in the first phase of the pilot. In the first phase, the study is being conducted in four cities namely Mumbai, New Delhi, Bengaluru and Bhubaneswar. Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will gradually become part of the pilot study, the Reserve Bank said.

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After the first phase, the pilot will be gradually extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

The Reserve Bank also informed that the possibility of pilot study will be increased by including more banks, customers and location as per requirement.

Through CBDC, the RBI aims to reduce the economy’s dependence on cash, facilitate international settlements at a low cost, and protect investors from the volatility of private cryptocurrencies.

Additional features and applications will be included in the future pilot depending on the outcome of the pilot, RBI said.

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Transactions can be made through a wallet provided by CBDC and Participating Bank. This wallet can be saved on mobile phone and other devices. Exchanges will be done in person to person (P2P) and person to merchant (Person to Merchant -P2M) modes. In this, payment to merchants can be done by scanning QR codes at merchant locations.

India’s digital currency will have the same features as real currency, reliability, security and settlement finality. As with real physical currency, it does not earn interest. But it can be converted to other forms of money like bank deposits, RBI said.

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