Get All Access for $5/mo

RBI's Retail e-Rupee Pilot to Kickstart on December 1 In its pursuit to popularize electronic alternate to currency, RBI sticks to its timeline for bringing Digital Rupee to the table

By Paromita Gupta

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Entrepreneur India

On Tuesday, the Reserve Bank of India announced the launch of the first pilot for retail digital Rupee (e₹-R) on December 1, 2022.

A digital rupee or Central Bank Digital Currency is a digital alternate to physical currency notes and coins issued by the RBI. The Union Finance Minister Nirmala Sitharaman while presenting the Union Budget 2022-23, had announced that the central bank would be bringing its digital currency soon.

The pilot will initially take place across four cities of Mumbai, New Delhi, Bengaluru and Bhubaneswar, with Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla joining later. Eight banks have been finalized for the retail digital rupee testing with the institutions being categorized into two phases. Phase one will see four banks: State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank begin the testing with Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank joining in phase two.

The pilot would be conducted in a closed user group (CUG) incorporating participating merchants and customers. The pilot would have e₹-R in the form of digital tokens which are a representative of legal tenders. The tokens would be administrated in the same denominations as its physical paper counterparts and metal coins and would be issued through the participating banks. The users would be required to have a bank's digital wallets on their devices for carrying out transactions with e₹-R. RBI has made it accessible for transactions to be made between both Person to Person (P2P) and Person to Merchant (P2M) through the use of QR codes. The digital currencies will be exchanged through blockchain-based wallets. A web3 terminology, blockchain is a technology which protects the data stored in a chain and makes it almost impossible to hack, copy, or change. Hoping to give a tough competition to the rise of crypotocurrencies in India, RBI's CBDC is similar in concept and technology, but different when it comes to legal tender and acceptance.

The central bank said that the digital tokens will provide the same characteristics as physical cash by demonstrating trust, safety, and settlement assurance.

With this announcement, RBI upholds its retail digital rupee launch timeline as stated by the official press release dated October 31, 2022. On Novemeber 1, RBI launched its first pilot testing for Digital Rupee - Wholesale segment (e₹-W) with nine banks joining the bandwagon.

"The scope of pilot may be expanded gradually to include more banks, users and locations as needed" the central bank of India stated.

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
Marketing

5 SEO Hacks to Help You Rank Fast

Discover the best SEO hacks you can use to rank fast and avoid waiting for months to see results.

Leadership

How His Personal Battle With Cancer Inspired This Founder's Solution for Patient Care

On this episode of "The Founder CEO," Michael O'Neil, founder and CEO of GetWellNetwork, discusses his inspiring journey as a leader and the transformative role of AI in healthcare.

Growing a Business

How Visionary Leaders Transform Curiosity Into Groundbreaking Ideas

Lee Brian Schrager, founder of the South Beach Wine & Food Festival, discusses the spark that launched FoodieCon, his best practices for running popular food events, and why all business owners need to adapt to social media trends.

Money & Finance

Avoid These 10 Mistakes Entrepreneurs Make with Money

Despite the challenging statistic that only 5% of startups survive beyond five years, common financial pitfalls often contribute to their failure. Through personal observation, I've identified the prevalent financial mistakes made by entrepreneurs.

Data & Recovery

Get $60 off This Portable VPN Travel Router

Why keep paying for a VPN service when you can have a tiny, lightweight piece of hardware that can provide you with a lifetime of maximum VPN protection?

Business News

Homeowners in These 10 States Pay the Most in 'Hidden' Upkeep Costs

Hidden home costs pile on top of mortgage payments.