The Reserve Bank of India (RBI) has made a big announcement regarding the digital currency – ‘Digital Rupee’. RBI has said that it will launch the first tranche for retail digital rupee (e₹-R) on December 1. E₹-R will be in the form of a digital token. It will also represent legal tender. The RBI also informed that the digital rupee will be issued in the same denominations in which paper currency and coins are currently issued. The Reserve Bank has announced the first pilot launch of the retail digital rupee on December 01, 2022. Earlier, the RBI had indicated in a press release dated October 31, 2022 that the pilot project of retail digital rupee would start in a month.
The e-Digital Rupee will be available to a Closed User Group (CUG) of customers and merchants participating in the pilot project at select locations. The e-digital rupee will be legal tender in the form of a token. It will be issued in the same denominations that are currently issued in the form of paper currency and coins.
It will be distributed through subsidiaries ie banks. Its users will be able to buy it through the app provided by the banks and keep it safe in their mobile phones. In this, transactions can be done from person to person and between person and traders. Merchants can be paid using the QR code displayed at the merchant store.
Four banks will be involved in the first phase of the retail digital rupee pilot project. These include State Bank of India, ICICI Bank, Yes Bank, IDFC First Bank. Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will be included in the second phase pilot project.
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