Here are some other things you need to know about RBI’s digital rupee, which aims to completely replace paper and metal money.
Retail Digital Rupee: What is it?
Retail Digital Rupee is an electronic form of currency designed to be used primarily for retail transactions. According to RBI, the retail digital rupee is in the form of a digital token representing legal tender. As it is the direct responsibility of the central bank, it can give access to safe money for payment and settlement purpose.
Retail Digital Rupee: How to use it?
It is possible to use retail digital money through digital wallets, mobile phones or other compatible electronic device to make online transactions. It has the same value as conventional currency. Transactions can be person-to-person (P2P) and person-to-merchant (P2M).
RBI said merchants can make payments using QR codes displayed at merchant locations. The retail digital rupee offers physical cash features such as trust, security and settlement closure. As in the case of cash, it earns no interest and can be converted into other forms of money such as bank deposits. More details about this will be revealed soon.
Retail digital rupees: Which banks and cities are experimenting?
According to RBI, a total of eight banking institutions have been selected to participate in this pilot program in a phased manner. The initial phase will involve participation of four banks at four locations across the country. These institutions are State Bank of India (SBI), ICICI Bank, Yes Bank and IDFC First Bank. In the next period, four more banks namely Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will participate in the programme.
The pilot program will focus on four cities namely Mumbai, New Delhi, Bangalore and Bhubaneswar. Subsequently, it will be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
Retail Digital Rupees: What is the purpose of the pilot program?
The pilot will investigate how robust the entire process of creating digital rupees, distributing them and using them at retail can be in real-time. Based on the information gathered from this pilot, future pilots will test various features and uses of the eR token and architecture.