Govt to soon launch E-Rupee on Pilot Basis
2022-10-08The Reserve Bank of India (RBI) will soon commence pilot launches of Central Bank Digital Currency (CBDC), referred to as Digital Rupee or E-Rupee, for specific use cases.
In its concept note on CBDC, RBI said the E-Rupee will provide an additional option to the currently available forms of money. The concept note also discusses key considerations such as technology and design choices, possible uses of the digital rupee, and issuance mechanisms, among others.
The RBI said, “The e-rupee will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money.”
The concept note presents the background, motivation, choices of design features and other policy frameworks for the e-rupee system for the country. The aim is to build an open, inclusive, interoperable and innovative CBDC system which will meet the aspirations of the modern digital economy of India.
“The Digital Rupee system will further bolster India’s digital economy, make the monetary and payment systems more efficient and contribute to furthering financial inclusion,” the central bank added.
CBDC can be classified into two broad types - general purpose or retail (CBDC-R) and wholesale (CBDC-W). Retail CBDC would be potentially available for use by all and while wholesale CBDC is designed for restricted access to select financial institutions. RBI’s digital currency can be easily converted against commercial bank money and cash.
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