With the involvement of eight institutions, the Reserve Bank of India (RBI) is starting its first retail digital rupee trial on December 1. Starting with four cities, the pilot will eventually include nine more cities across India.
8 banks and 13 cities are chosen by RBI to test retail digital currency.
The “first pilot for retail digital rupee (e-R)” will commence on December 1st, according to a statement released on Tuesday by the Reserve Bank of India (RBI). This announcement came after the RBI’s pilot program for wholesale central bank digital currency (CBDC), which got underway on November 1.
In two phases, the retail digital currency experiment will involve eight institutions. Four banks from throughout India will take part in the first phase: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. The second phase will include participation from Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.
The central bank of India explained:
Mumbai, New Delhi, Bengaluru, and Bhubaneswar would be the first four cities the pilot would cover. Later, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla would also be included.
According to the RBI, “the pilot’s scope may be gradually expanded to include additional banks, users, and locations as required.”
RDR: Retail Digital Rupee of RBI
The central bank of India outlined:
The e-R would be presented as a digital token that serves as money.
The central bank stated that the digital rupee will be distributed through intermediaries like banks and will be produced in the same denominations as present paper money and coins.
The central bank explained that users would be able to interact using e-R through a digital wallet provided by the collaborating institutions and kept on mobile devices, emphasizing that P2P or P2M transactions were also possible (P2M). Payment-accepting QR codes will be displayed by retailers.
The e-R would provide characteristics of actual money, such as trust, safety, and settlement finality.