The Reserve Bank of India (RBI) has authorised four banks, in the initial phase of a pilot programme, to sell the digital rupee. These banks are — State Bank of India, Yes Bank, ICICI Bank, and IDFC First Bank. Four more banks — Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank — are expected to join this pilot programme soon.
The RBI started the pilot of digital or e-rupee in four cities including — Mumbai, New Delhi, Bengaluru, and Bhubaneswar. In the days to come, the service will be available in some more cities. Cities that are expected to get access to e-rupee in the next phase are – Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
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On December 1, the RBI rolled out the first retail digital Rupee pilot, a month after it launched a wholesale CBDC pilot for trading in government bonds.
Digital rupee: Key features
The digital rupee comes in the form of a digital token that represents legal tender and is issued in the same denominations that paper currency and coins are being issued. In simple words, e-rupee or digital currency is just a digital form of paper money, which means that the value of the digital rupee and paper money are the same.
According to the RBI, the Central Bank Digital Currency (CBDC) is the RBI’s official form of currency. The regulator clarified that the CBDC, also known as the digital rupee, is interchangeable one-to-one at par with the fiat currency and is the same as a sovereign currency.
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Is digital rupee same as cryptocurrency?
No. The digital rupee and cryptocurrency are in no way linked to one another. Cryptocurrencies are based on blockchain, but it is not the case with CBDC. The main idea behind launching the e-rupee was to eliminate paper money from the market eventually. Another aspect where a cryptocurrency and a digital rupee do not match is the valuation. Cryptos are driven by market demand and their value changes from time to time depending on the market conditions. However, the value of the e-rupee stays the same, just like cash money.
Can digital rupee be transferred to family and friends?
One can easily transfer digital money to friends or family just as physical currency. The only requirement is that both the sender and receiver transacting must have a digital wallet for the transaction.
