HYDERABAD: The Reserve Bank of India has launched India’s e-rupee on Thursday, as a pilot covering four cities New Delhi, Mumbai, Bengaluru and Bhubaneswar and will subsequently expand it to nine more cities in the initial phase.
The other nine cities to which the pilot will be later extended are: Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
Four banks – State Bank of India, Yes Bank, ICICI Bank and IDFC First Bank – will be involved initially in the launch of the digital transactions. Another four banks – Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank – will join the pilot subsequently.
What is e-Rupee?
The e-Rupee will be in the form of a digital token (sort of an official crypto currency) which will be a legal tender. It will be issued in the same denominations that paper currency and coins are currently issued. Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank. The digital rupee would be distributed through intermediaries (banks).
How to access and transact with e-Rupee?
RBI said users will be able to access and transact with e-Rupee through a digital wallet offered by the participating banks and store it on mobile phones. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations.
What is the use of e-Rupee?
The e-rupee will reduce operational costs in managing physical cash, bringing efficiency in payment systems. It will also boost innovation in cross-border payment and curb concerns over money laundering, tax evasion with private cryptocurrencies like Bitcoin, Ether, etc.