The growing interest and involvement in digital currency is being noticed the world over. The popularity of cryptocurrency and India’s own attempt to go digital in terms of money are nothing new, having been in place for years now.
Cryptocurrency and the massive number of users involved in it had brought it to the forefront of various governments across the world with many discussing what to do and how to regulate it. It seems that in light of that, the Reserve Bank of India (RBI) last month launched the first central bank digital currency (CBDC) for the wholesale sector.
Now, taking it a step further, the RBI has launched the pilot for the retail digital rupee, or e₹-R that can be used for daily basis transactions by people. Here we take a look at the top 10 things to know about this digital currency.
What Is e ₹-R?
1. The e ₹-R is a digital token that would be accepted as legal tender and issued in the same dominations as the paper currency and coins of the country.
2. Currently the first phase will have the 4 major banks of the country participating, namely State Bank of India, Yes Bank, ICICI Bank and IDFC First Bank.
In some time, reports state that Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will also be joining the program.
3. The pilot is at the moment only being rolled out in select few cities, with the first four being
- Mumbai,
- Delhi,
- Bengaluru, and
- Bhubaneswar.
Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla are expected to join in over time.
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4. Regarding its use reports stated that “e₹-R can be used for person-to-person (P2P) and person-to-merchant (P2M) payments.”
Furthermore “Key use cases may be programmable payments, cross-border payments with immediate benefits of lower cost of printing and managing currency, instant payments and finality of settlement and enhanced safety,” said Mihir Gandhi, partner and leader for payments transformation at PwC India.
5. The transactions will be done through a digital wallet that currently can only be issued through approved banks and stored on digital devices of people.
6. As per a Moneycontrol report the CBDC is “similar to sovereign paper currency, but in a digital form and is exchangeable at par with the existing currency. Meaning, Rs 100 in CBDC form is the same as Rs 100 in the form of notes.”
7. RBI also added that “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.”
9. RBI’s concept note said that the e ₹-R can be used by “all private sector, non-financial consumers, and businesses.”
10. For the time being only people living in the approved cities will be able to use this digital rupee, but according to Mayank Goyal, Founder and CEO, moneyHOP “Retail e-Rupee will also enjoy fungibility with other forms of money. The idea largely is to move towards a cashless society and to provide the same privileges to end users that they enjoy with cash but largely in a digitised manner.”
Image Credits: Google Images
Feature Image designed by Saudamini Seth
Sources: Hindustan Times, Moneycontrol, The Economic Times
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This post is tagged under: e rupee india, RBI, RBI e rupee, e ₹-R, Reserve Bank of India, digital currency, Reserve Bank of India digital currency, digital currency india, Reserve Bank of India e rupee trial, retail digital Rupee, retail digital Rupee india, retail digital Rupee rbi
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