The retail digital rupee will be introduced on December 1, 2022, as the Reserve Bank of India (RBI) said today.
Eight banks have been chosen by the central bank to take part in this trial in stages.
A digital token that stands in for legal cash will be used to represent the retail digital rupee. Digital currency will be issued by the RBI in the same denominations as paper money and coins.
Through a digital wallet on mobile phones and other devices, retail digital rupee transactions can be completed. Digital currency transactions can only be made through the digital wallets provided by banks taking part in the RBI’s digital rupee scheme.
Banks will distribute the retail digital currency. Digital currency can be used for both P2P (person-to-person) and P2M (person-to-merchant) transactions (P2M). Using QR (Quick Response) codes, customers can make payments to merchants at their physical locations.
Trust, safety, and settlement finality are three characteristics of physical money that the retail digital rupee would give. Like cash, it won’t accrue interest and can be changed into other kinds of payment like bank deposits.
A digital token that stands in for legal money would be the retail digital rupee (-R). It would be distributed in the same denominations that coins and paper money are now distributed in. It would be spread by means of middlemen, namely banks. Through a digital wallet provided by the collaborating banks and kept on users’ mobile phones or devices, users would be able to conduct transactions with e-R.
Four banks—State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank—will start the first phase in four different locations across the nation. Later on, the experiment will include participation from four other banks: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.
Mumbai, New Delhi, Bengaluru, and Bhubaneswar will all be included in the pilot, according to the RBI. Later, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla will also be included.