India’s central bank, the Reserve Bank of India (RBI), is launching its first digital rupee retail pilot on December 1 with the participation of eight banks. The pilot will start in four cities and then expand to cover nine more cities across India.
RBI chooses 8 banks and 13 cities to test retail digital currency
The Reserve Bank of India (RBI) announced on Tuesday that “the first pilot for the digital retail rupee (e₹-R)” will be launched on December 1. This announcement follows the RBI’s Central Bank Digital Currency (CBDC) Wholesale Pilot which began November 1.
Eight banks will participate in the two-phase retail digital currency pilot. State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four Indian cities will participate in the first phase. Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will participate in the second phase.
The Indian central bank detailed:
The pilot would initially cover four cities namely Mumbai, New Delhi, Bengaluru and Bhubaneswar and later expand to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
“The scope of [the] the pilot can be gradually expanded to include more banks, users and locations as needed,” the RBI said.
About RBI Retail Digital Rupee
India’s central bank explained:
The e₹-R would come in the form of a digital token representing legal tender.
The digital rupee will be issued in the same denominations as paper currency and coins are currently issued, the central bank noted, adding that it would be distributed through intermediaries, such as banks.
“Users will be able to transact with e₹-R through a digital wallet offered by participating banks and stored on mobile phones/devices,” the central bank detailed, noting that transactions can be person-to-person (P2P). or anyone. -to-dealer (P2M). Merchants will display QR codes that can be used to make payments.
“e₹-R would offer characteristics of physical money such as trust, security and finality of settlement. As with cash, it will earn no interest and can be converted into other forms of money, such as deposits with banks,” the central bank continued, adding:
The pilot will test the robustness of the entire process of creating, distributing and using the digital rupee in real time. Different features and applications of the e₹-R token and architecture will be tested in future pilots, based on lessons learned from this pilot.
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