The Reserve Bank of India (RBI) has announced the launch of its digital currency digital Rupee or e-rupee (e₹) on December 1. This will be a pilot project and RBI has partnered with four banks including State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank for this.
The pilot program will run with a close group of customers and merchants in Mumbai, New Delhi, Bengaluru, and Bhubaneswar. Later, it will also be expanded to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
During the pilot program, RBI will test the digital rupee creation, distribution, retail usage, and robustness of the entire process. Based on the learning from this pilot run, RBI will improve the e-Rupee token and architecture.
What is the digital Rupee or e-Rupee?
The e-Rupee (e₹) is a digital currency offered by eligible banks. It will be stored on mobile phones and users will be able to make transactions through a digital wallet. Basically, the e-Rupee is a digital token and will be issued in the same denominations as paper currency and coins. Unlike cryptocurrencies, the e-Rupee represents legal tender.
Users will be able to pay merchants in e-Rupee by scanning a QR code. It will work in the same way as UPI but there’s one difference. In UPI, money moves from one bank account to another. The e-rupee moves from one digital wallet to another digital wallet. Without any involvement of a bank.
e-Rupee comes in two forms: e-Rupee Retail (e₹-R) and e-Rupee Wholesale (e₹-W). e₹-W is for interbank and other wholesale transactions while the e₹-R is for normal users. As per reports, RBI already launched e-Rupee Wholesale (e₹-W) last month and e-Rupee Retail (e₹-R) will be launched on December 1.
Unlike cryptocurrencies, the e-Rupee is backed by a central bank. But the payment process is similar and payment settlement happens instantaneously without any involvement of a mediator.
The e₹ is a form of digital currency that represents legal tender in India.
The e-rupee pilot is basically a test when RBI will monitor the creation, distribution, retail usage, and robustness of e-rupee.
e rupee is very similar to cryptocurrency. It offers the same instant P2P transactions without the involvement of a bank. Unlike cryptocurrency, e rupee is backed by a central bank
Yes, India is launching is a digital currency called the e-rupee (e₹)
e₹ is the symbol of the e-rupee, India’s own digital currency.
