e-Rupee, India’s first digital currency was launched on December 1. Here’s everything you need to know about the retail digital currency of the largest democracy in the world.
What is the e-Rupee?
The Reserve Bank of India (RBI) is launching Central Bank Digital Currency (CBDC), a form of official cryptocurrency. While it is in the form of a digital token, it will be in the same denominations as the paper currency in use. “CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different,” stated the RBI.
Users can transact with the e-Rupee through a digital wallet offered by participating banks, accessible through mobile phones. Additionally, it allows person-to-person transactions and person-to-merchant transactions through QR codes. The first phase will be covering Mumbai, Bangalore, New Delhi, and Bhubaneshwar. The pilot phase includes the State Bank of India, Yes Bank, IDFC First bank, and ICICI Bank. However, the service will be extended to other banks and cities with time.
More on digital currency and its need
Experts believe the e-Rupee will help in reducing operational costs that are involved in the management of physical cash. Additionally, it will also help in increasing efficiency in payment systems. As per the RBI, the pilot program will test the robustness of the process in addition to creation, retail usage, and distribution.
“Different features and applications of the e-R token and architecture will be tested in future pilots, based on the learnings from this pilot,” stated the central bank.
Additionally, the government is hoping the e-Rupee will help in quelling concerns over terror financing, tax evasion, money laundering, etc which have been an issue with private cryptocurrencies such as Ether and Bitcoin.
