Mumbai:,Nov.29. The reserve Bank of India on Tuesday said the first pilot for retail digital rupee (e₹-R) will be launched on December 01. The Central Bank further added that the pilot would cover select locations in closed user group (CUG) comprising participating customers and merchants.
The RBI further added that eight banks have been identified for phase-wise participation in this pilot and the first phase will begin with four banks — State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country.
Other four banks such as Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently.
“The pilot would initially cover four cities, viz., Mumbai, New Delhi, Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The scope of pilot may be expanded gradually to include more banks, users and locations as needed,” it said.
The RBI added that the pilot project is aimed at testing the robustness of the entire process of digital rupee creation, distribution and retail usage in real time. The Central Bank stated that different features and applications of the e₹-R token and architecture will be tested in future pilots, based on the learnings from this pilot.
As per the updates from RBI, the e₹-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued, and would be distributed through intermediaries, i.e., banks.
The bank said the users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices.
“Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations,” it noted.
The RBI said the e₹-R would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks.