NEW DELHI: The Reserve Bank of India today (Thursday, December 1) launched the first retail digital rupee (e?-R) pilot. The pilot will cover selected locations in Closed User Groups (CUGs), which include participating customers and merchants.
“The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time. Based on the experience gained from it, different functionalities and applications of the e₹-R token and architecture will be tested in future pilot pilots,” Reserve Bank of India said. (Also read: Attention! 5 Big Changes From December 1, 2022 That Will Have an Immediate Impact on Your Finances)
Here are 10 takeaways from RBI Retail Digital Rupee e₹-R
1. e₹-R will take the form of digital tokens representing fiat currency.
2. The denomination is the same as the current banknotes and coins issued.
3. It will be distributed through intermediaries namely banks.
4. Users will be able to transact with e₹-R through digital wallets provided by participating banks and stored on their phones/devices.
5. Transactions can be person-to-person (P2P) and person-to-merchant (P2M).
6. Payment can be made to the merchant using the QR code displayed at the merchant’s location.
7. e₹-R will provide the characteristics of physical cash such as trust, security and settlement finality.
8. Like cash, it does not accrue any interest and can be converted into other forms of money such as bank deposits.
9. Eight banks have been identified to participate in the pilot in phases. The first phase will start with four banks in four cities across the country, namely State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank. Subsequently, four more banks namely Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join the pilot.
10. The pilot will initially cover four cities, namely Mumbai, New Delhi, Bangalore and Bhubaneswar, and later expand to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Cochin, Lucknow, Patna and Shimla. The pilot may gradually expand as needed to include more banks, users and locations.