The Reserve Bank of India (RBI)
launched a digital rupee pilot in four cities. The primary goal of introducing digital rupees is to eventually phase out paper money, lowering the cost of managing and transporting paper money.
Digital Rupee or e-Rupee has no connection to cryptocurrency and is not based on Blockchain technology. Central bank Digital currency (CBDC) is a digital form of cash or paper money. That also means that the digital Rupee and paper money have the same value.
The Digital rupee pilot programme is started in four cities: Mumbai, New Delhi, Bengaluru, and Bhubaneswar with four banks: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. When the testing phase begins, the RBI will expand the partnership to include four more banks: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. In the coming days, the service will be expanded to more cities. Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla are among the cities that will have access to digital rupees in the second phase. Here is all you need to know about digital currency.
How to get digital rupees?
For the initial testing, the RBI has partnered with four banks to distribute digital rupees to users: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. The pilot is currently being tested in Mumbai, New Delhi, Bengaluru, and Bhubaneswar by the RBI. To purchase digital rupees, users must go to the official app or website of one of the four designated banks. For the time being, the RBI has not disclosed the exact process for purchasing digital rupees, but it has stated that customers will be able to make payments with digital rupees by scanning QR codes displayed at merchant locations, and the money will be deducted from their bank wallet.
How to use e-Rupee?
The e-R will be issued in the same denominations as paper money and coins are now. Users will be able to transact with e-R using a digital wallet provided by participating banks and stored on their mobile phones or devices.
Customers will be able to create a wallet containing e-R digital tokens and use it for a variety of transactions or use cases with participating banks in the pilot. The e-R will be backed by the central bank and will be compatible with existing bank accounts. PwC India, Transformation. e-R for transactions can be both person-to-person (P2P) and person-to-merchant (P2M). Customers can pay merchants by scanning QR codes displayed at merchant locations.
Can Digital rupee be used for buying?
The RBI has stated unequivocally that users will be able to use digital rupees to purchase goods and shop at their local kirana stores. Person to Person (P2P) and Person to Merchant (P2M) transactions in digital rupees are both possible (P2M). Trust, safety, and settlement finality would be physical cash characteristics of the e-Rupee.
Can digital rupee be used to send to someone?
Customers can send digital rupees to friends and family members. For the time being, only designated banks will be able to support digital rupee transfers (State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank). As a result, users will be able to store digital rupees in the same way that they store money in their Paytm wallet, and they will be able to use them for transactions as needed.
Are digital rupee and cryptocurrency the same?
The digital rupee and cryptocurrency are not the same thing and have nothing to do with one another. The newly launched digital Rupee is essentially Central Bank Digital Currency (CBDC), and the primary goal of its introduction is to eventually eliminate cash money from the market. Another difference between crypto and digital rupee is the value factor.
Cryptocurrency is a risky market, and its value fluctuates according to market conditions. This isn't the case with digital rupees. Its value remains constant over time, just like cash money.