Thursday, December 1, 2022

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India has its own digital currency, RBI launches first pilot project for digital rupee!

New Delhi: The Reserve Bank of India (RBI) launched its trail for first pilot project of digital rupee (e-rupee) for specific use cases from November 1. According to an RBI statement, the central bank will conduct a pilot in digital rupee for the wholesale industry on Tuesday. The Reserve Bank will shortly start trial launches of the digital rupee (e-rupee) for specific use cases, according to a press release from the central bank on October 7.

According to the central bank’s statement, “According to a press release from the RBI dated October 7, 2022, the Reserve Bank will shortly start trial launches of the Digital Rupee (e-rupee) for particular use cases. So, on November 1, 2022, the first pilot for the Digital Rupee – Wholesale segment (e-rupee-W) will start.”

The use case for this pilot, according to the official release, was the settlement of secondary market transactions in government securities. It was added that settlement in central bank money would lower transaction costs by avoiding the need for infrastructure to provide settlement guarantee or for collateral to reduce settlement risk. The use of the digital rupee – wholesale segment (e-rupee-W) is anticipated to increase the efficiency of the interbank market, according to the statement.

Additionally, it stated that “Future pilots will concentrate on other wholesale transactions and cross-border payments, based on the lessons from this pilot.”

Nine banks have reportedly been chosen to participate in the trial, including the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC.

It further stated that the first trial for the retail sector’s digital rupee (e-rupee-R) is scheduled to go live in less than a month in a few key areas with select limited user groups made up of customers and merchants. In due course, information regarding the e-rupee-R pilot’s operationalization will be released.

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