IDFC FIRST Bank And ToneTag Partner To Launch CBDC Payments
The digital rupee offers features of physical cash like trust, safety and settlement finality
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IDFC FIRST Bank has partnered with ToneTag, a global proximity and voice tech solution provider to enable acceptance of Digital Rupee at Merchant outlets. This partnership comes at the back of a pilot program launched by the Reserve Bank of India (RBI). RBI, recently announced the launch of Central Bank Digital Currency (CBDC) for retail users. This initiative is in the first phase of its implementation with 4 banks including IDFC FIRST Bank.
Through this initiative, the currency is issued in the same denominations and distributed through financial intermediaries and the users will be able to transact through a digital wallet offered by the participating banks. The digital rupee offers features of physical cash like trust, safety and settlement finality. Like cash, the CBDC will not earn any interest and can be converted to other forms of money, like deposits with banks, according to an official statement.
"This solution will change how merchants transact, and IDFC FIRST Bank is a proud partner in this collaboration. Digitization of cash payments is one more step in making transactions easier for our customers. As a bank that firmly believes in 'Customer First' approach this initiative aligns well with the same," said Madhivanan Balkrishnan, COO, IDFC FIRST Bank.
As per RBI, users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones or hardware wallets to facilitate person-to-person (P2P) and person-to-merchant (P2M) transactions. The e₹-R will continue to offer features of physical cash of safety, trust, and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks, the statement added.
"We are glad to collaborate with IDFC First Bank and participate in the first phase of CBDC retail pilot. In this pilot ToneTag will provide solutions through which merchants will be enabled to accept digital currency. With this launch India becomes one of the only few companies Globally to take this leap of digitalizing cash and reap it's great potential to reduce counterparty credit and liquidity concerns, as well as increase the efficiency of payments and securities settlement. This indeed is going to be India's decade and many kudos to RBI," said Kumar Abhishek, founder and CEO ToneTag.