RBI Digital Currency: The Reserve Bank of India has announced the launch of the retail digital rupee on December 1, 2022, on a pilot basis. The Central Bank of the country has also identified 8 banks for phase-wise participation in this trial. Notably, Digital Currency, or the Rupee is an electronic form of money that can be used in contactless transactions. During the Union Budget 2022, Union Finance Minister Nirmala Sitharaman had announced that the Central Bank will be rolling out its digital currency soon.
What is Retail Digital Rupee?
The Retail Digital Rupee will be in the form of a digital token that represents legal tender. The Reserve Bank of India will issue the digital currency in the same denominations that the paper currency and coins are issued.
It will be distributed through intermediaries, i.e. banks. Users will be able to transact with e-R through a digital wallet offered by the participating banks and stored on mobile phones/devices.
RBI announces the launch of the first pilot for retail digital Rupee (e₹-R) on December 1. The e₹-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. pic.twitter.com/Q6GcwZnsWg
— ANI (@ANI) November 29, 2022
Retail Digital Rupee: Key Points
1. Retail Digital Rupee transactions can be carried out through a digital wallet on mobile phones and other devices. Only those digital wallets offered by banks participating in the RBIs digital rupee program can transact in digital currency.
2. The retail digital currency will be distributed through banks.
3. The transactions in digital currency can be carried out between person-to-person (P2P) and Person-to-Merchant(P2M). Payments to Merchants can be made using QR codes displayed at Merchant locations.
RBI’s Retail Digital Rupee on Pilot Basis
1. The first phase of Retail Digital Rupee will begin with four banks- State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank across the country. Four other banks- Union Bank of India, Bank of Baroda, HDFC Bank, and Kotak Mahindra Bank will join the trial later.
2. The Pilot will cover New Delhi, Mumbai, Bengaluru, and Bhubaneshwar. It will later extend to Gangtok, Ahmedabad, Hyderabad, Guwahati, Kochi, Indore, Patna, Lucknow, and Shimla.
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