Today, India’s first digital rupee pilot project has been launched out by the Reserve Bank of India. SBI, Bank of Baroda, Union Bank, HDFC, ICICI, Kotak Mahindra, Yes Bank, IDFC, HSBC have made transactions using this Digital rupees. On the first day of its launch, the RBI reported that business worth Rs 275 crore was done.
India’s first digital rupee pilot project has been rolled out by the Reserve Bank of India. Digital rupee (e₹) will be used for issuing virtual currency for transactions in government securities. The concept of digital currency is a bit tricky to understand as it will not be traded like physical money.
Digital rupee has been launched for wholesale transactions i.e. for large transactions. Digital rupee, also known as Central Bank Digital Currency (CBDC), is a digital form of currency notes issued by a central bank. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money.
Digital Rupee will be used for large payments and settlements. According to the RBI, it will be used as the settlement amount on the purchase and sale of government securities i.e. government bonds. The Reserve Bank has also said that it will also be used for retail transactions soon.
Similar to checking the bank balance, one can check the balance in the wallet. CBDC will be based on blockchain technology. Individuals will be able to pay it to whomever they want to pay and it will reach their account.
