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What is a digital rupee, often known as an e-Rupee?
According to the RBI, the e-Rupee is a type of digital token that serves as legal money. The digital Rupee, unlike cryptocurrencies, is produced in the same denominations as paper money and coins.
How would the digital rupee function?
The RBI said that digital rupees, or e-Rupees, will be supplied to clients and merchants through intermediaries such as banks. Users will be able to transact using e-Rupees via a digital wallet provided by approved banks and saved on their mobile phones or devices.
The central bank also announced that digital rupee transactions can take place between Person to Person (P2P) and Person Merchant (P2M) (P2M). Users will be able to make e-Rupee payments using QR codes displayed at merchant locations, exactly like internet transactions.
RBI also mentioned that 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 e-Rupee token and architecture will be tested in future pilots, based on the learning from this pilot.”
What is the list of qualified banks and cities?
The central bank indicated that the digital rupee will be introduced in stages. To begin with, the pilot will commence in four locations with four banks: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Mumbai, New Delhi, Bengaluru, and Bhubaneswar are among these cities.
Later, the service would be expanded to include Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla, among other Indian towns. The facility will eventually be expanded to other sections of the country. The official launch date has not yet been announced.
The RBI has been talking about launching the digital Rupee for a long time and beginning December 1, certain users will be able to make transactions using the e-Rupee. The central bank's overarching goal with the digital Rupee is to carry out a full-fledged launch of the CBDC (central bank digital currency) shortly.
