Five additional banks will shortly pilot e-Rupee in nine additional cities.
Digital Rupee
The RBI will issue the tokenized Digital Rupee (e) as a central bank digital currency (CBDC). Digital Rupee was planned in January 2017 and launched in 2022–23. Digital Rupee uses blockchain.
It will be unique and Central Bank-regulated like banknotes. RBI owes. Online and offline. RBI will launch e-W for financial institutions' interbank settlements and e-R for consumer and commercial transactions.
The Digital Rupee will save the public, businesses, banks, and RBI $49,848,000 in security printing costs.
The e-Rupee will shortly be introduced in nine cities by five other banks.
The Reserve Bank of India (RBI) said that its central bank digital currency (CBDC) pilot programme, the e-Rupee, will be expanded to nine more cities. Eight banks are already part of the programme, which began testing the e-rupee for retail customers in December 2022. Five more banks will join the programme.
Only 50,000 people have access to the retail CBDC, and 5,000 are businesses. At the annual post-policy press conference on Wednesday, deputy governor T. Rabi Sankar informed reporters that eight banks are now offering the service by invitation only in five locations.
Five other banks will soon be added to the platform due to the smooth acceptance thus far, and the number of cities where the pilot service is now available will rise from the current five to nine, according to Sankar.
"Having discussed this and the possibility of being proven correct, let me restate our desire for the process to proceed. However, we like for the procedure to proceed gradually and slowly. We have no pressing need to complete a task swiftly.
"We have our goals in mind for users, retailers, and other things. However, according to the deputy governor, we will proceed cautiously since we don't want to take any action before fully appreciating the potential consequences.
The adoption of the e-rupee has been trouble-free so far, according to RBI Deputy Governor T Rabi Sankar, and the volume of transactions has reached about Rs 7.7 lakh.
The RBI introduced the CBDC on November 1, 2022, for wholesale use, and on December 1, 2022, for retail use.
The retail e-rupee is piloted within a closed user group (CUG), which comprises participating customers and merchants. At the same time, the wholesale CBDC is restricted to the settlement of secondary market transactions in government securities.
Four banks participated in the initial pilot program: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Later, the Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank joined the group.
The e-rupee will obviate the need for settlement guarantee infrastructure or collateral to decrease settlement risk, which is expected to increase interbank market efficiency and lower transaction costs.
The RBI has stated that it will adopt the e-rupee cautiously and is not in a rush to move swiftly. The RBI wants the adoption process to proceed gradually and slowly. The RBI has goals for consumers and merchants, but before moving further, it needs to fully grasp the possible effects of the e-rupee.
