Reserve Bank of India to begin digital rupee pilot from December 1
New Delhi, November 29
The Reserve Bank of India (RBI) on Tuesday announced the pilot launch of digital rupee from December 1 at select locations in closed user groups (CUGs) of participating customers and merchants.
The pilot would initially cover four cities ndash; Mumbai, Delhi, Bengaluru and Bhubaneswar. It will later be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
The first phase will begin with four banks—SBI, ICICI Bank, Yes Bank and IDFC First Bank in Mumbai, Delhi, Bengaluru and Bhubaneswar. Four more banks—Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank—will subsequently join this pilot.
Called Central Bank Digital Currency (CBDC), the digital rupee is a digital form of currency notes issued by the RBI which can be used in contactless transactions.
The digital rupee would be issued in the same denominations that paper currency and coins are currently issued and would be distributed through banks.
Users will be able to transact with digital rupee through a digital wallet offered by the participating banks and stored on mobile phones or 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,'' said the RBI note.
Union Finance Minister Nirmala Sitharaman had announced while presenting the Budget this year that the RBI would be rolling out its digital currency soon. It would offer features of physical cash such as trust, safety and settlement finality. It will not earn any interest and can be converted to other forms of money, like deposits with banks.
"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," said the RBI.
The Tribune
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