RBI Launches Retail Digital Rupee On A Pilot BasisTop Stories

December 02, 2022 14:40
RBI Launches Retail Digital Rupee On A Pilot Basis

(Image source from: Financialexpress.com)

The Reserve Bank of India (RBI) on Thursday announced the launch of the digital rupee pilot for a closed user group. “You would be able to use the digital rupee with the same confidence and trust which you place while using physical bank notes issued by the Reserve Bank of India. Through the use of token-based digital rupee, citizens will be able to make or receive payments in currency in completely digital mode through a mobile app. Based on the requirement placed by the banks, digital repay will be created by RBI using the latest technology and will be digitally issued to the banks in a secured manner. Going forward, the RBI will work towards the interoperability of the digital rupee with other payment systems. The pilot will cover a few cities with select banks” told the official statement of the Reserve Bank of India.

The transactions can be between person-to-person (P2P) or person-to-merchant (P2M). They can be made using Quick Response (QR) codes that are displayed at the locations of the merchants. The digital rupee will offer features like physical cash like trust, settlement ffinality and safety. RBI said that it will get no interest in the case of cash and it can be converted to other forms of money like bank deposits. The pilot will also test the robustness of the entire digital rupee creation and distribution. The different features and applications of the digital rupee token will be tested in future pilots that are based on the learnings from this pilot. State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank will participate in the pilot project in four cities. Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join the pilot batch at a later date. Mumbai, New Delhi, Bengaluru and Bhubaneswar are the cities covered initially and they would be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

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