India’s central bank RBI will launch the country’s first pilot for a retail e-rupee on December 1st (Tuesday). The e-rupee will be the Reserve Bank of India’s version of the central bank digital currency (CBDC) and will cover select locations and would be available to a closed user group to start with. The group as per the bank will include merchants and some participating customers. “It would be distributed through intermediaries such as banks.”
The pilot will be launched in two phases. The first phase will have four banks participating across four cities, these banks are State Bank of India, ICICI Bank, Yes Bank and IDC First Bank.
Watch | India to introduce its digital currency ‘E-Rupee’ soon
In the second phase, four more banks, namely: Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will also join across more cities. At a later stage, the scope of the pilot may be expanded gradually to include more banks, users and locations as needed, said the RBI.
Reuters reports that users will be able to transact using the e-rupee via their mobiles or devices, using the digital wallets of participating banks.
“It would be issued in the same denominations that paper currency and coins are currently issued,” said RBI in a statement. However, unlike normal bank deposits, this would not earn users any interest and could not be converted into other forms of money.
“The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time,” said the bank.
Based on the pilot test results, the central bank will then test other applications and features of the e-currency.
Previously, on November 1, the Indian central bank also launched a pilot of the wholesale e-rupee. In it, nine participating banks have for a month been transacting in government securities using the e-rupee.
(With inputs from agencies)
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