The Reserve Bank of India (RBI) on Tuesday said it would launch the first pilot of retail digital Rupee (e ₹-R) on Thursday to assess the stability of the complete process of digital currency creation, distribution and retail usage in real-time. The central bank has already begun select launches of the legal tendered digital currency for the wholesale segment starting earlier this month
RBI stated that this pilot would cover select locations in closed user groups (CUG) involving participating customers and merchants. It has picked four cities and four banks for the first phase of the trial.
What is retail digital Rupee (e ₹-R)?
1) According to the RBI, the e ₹-R is a digital token that serves as a legal tender. It would be issued in the same denominations as paper currency and coins. It would be circulated through intermediaries.
2) Users will transact with e ₹-R through a digital wallet offered by the banks taking part in the initiative. The digital currency will be stored on mobile phones.
3) Transactions can be made in either person-to-person (P2P) or person-to-merchant (P2M). The central bank said that QR codes exhibited at merchant locations could be used for payments to merchants.
4) Alike physical cash, this digital currency will offer trust, safety and settlement finality.
5) Also similar to cash, it will not earn any interest and can be converted into other forms of money as well as used for deposits with banks
Who can use digital currency?
The RBI stated that this pilot would cover select locations in closed user groups (CUG) involving participating customers and merchants.
It has picked four banks and four cities for the trial’s first phase.
The banks selected for the first phase are:
1) State Bank of India
2) ICICI Bank
4) IDFC First Bank
The four cities are:
2) New Delhi