RBI to launch pilot for retail digital rupee on December 1 

The central bank commenced the first pilot in the wholesale segment on November 1, 2022. Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by the RBI.

Published: 29th November 2022 04:46 PM  |   Last Updated: 29th November 2022 05:38 PM   |  A+A-

RBI

Reserve Bank of India. (File Photo)

BENGALURU: The Reserve Bank of India (RBI) on Tuesday said the first pilot for retail digital rupee will be launched on December 1. The pilot will cover select locations in a closed user group comprising participating customers and merchants.

The central bank commenced the first pilot in the wholesale segment on November 1, 2022. Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by the RBI.

Earlier, releasing the concept note on CBDC, the RBI said with the advent of cutting-edge technologies, digitalisation of money is the next milestone in monetary history. Advancement in technology has made it possible for the development of a new form of money - CBDC, the RBI said.

The retail digital rupee will be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through banks.

Users will be able to transact with the digital rupee through a digital wallet offered by the participating banks and stored on mobile phones / devices.

Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. 

The retail digital rupee will offer features of physical cash like trust, safety and settlement finality. The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real time. Different features and applications of the digital rupee token and architecture will be tested in future pilots, based on the learnings from this pilot, the RBI said.

Eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. Four more banks - Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently.

The pilot will initially cover four cities- Mumbai, New Delhi, Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The scope of pilot may be expanded gradually to include more banks, users and locations as needed, the RBI added.



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