RBI to launch first pilot for retail digital rupee from December 1; Know all about it
The retail digital rupee will be in the form of a digital token that represents legal tender. The RBI will issue digital currency in the same denominations that paper currency and coins are issued.
The first pilot for retail digital rupee (e₹-R) will be launched on December 01, 2022, the Reserve Bank of India (RBI) announced on November 29. According to the announcement, the closed user group (CUG) of participating customers and retailers would cover a few specific regions in the pilot.
According to the RBI, eight banks have been chosen to participate in this pilot project in different phases. The first phase will start with four banks — State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank — in four different cities throughout the nation.
According to a press statement from the central bank, four other institutions — Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank — will eventually join this experiment.
"Mumbai, New Delhi, Bengaluru, and Bhubaneswar would be the first four cities the pilot would cover. Later, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla would also be included. As needed, the pilot's scope may be gradually increased to cover additional banks, users, and locations," it added.
Users will be able to exchange digital rupee for goods and services from one person to another or from one person to a merchant using a digital wallet provided by partner banks and stored on mobile devices. Merchant websites will show QR codes that may be used to make payments to them.
According to the RBI, the pilot programme aims to "evaluate the resilience of the entire process of creating, distributing, and using digital rupees at retail in real-time." Based on the lessons learned from this pilot, other aspects and uses of the e-R token and architecture will be evaluated in further pilots.