RBI officially launches first e-Rupee pilot

The Reserve Bank of India (RBI) has officially launched its first digital Rupee (e₹-R) as part of a pilot project that is now available for purchase and trade via select banks in select cities. The digital Rupee can be used for making person-to-person (p-to-p) and person-to-merchant (p-to-m) transactions.

The digital Rupee can be converted into cash via commercial banks. Also known as Central Bank Digital Currency (CBDC), the digital Rupee is issued and controlled by RBI and it’s the central bank that decides all the parameters for the CBDC.

Unlike a cryptocurrency, where the value fluctuates based on the transactional volume, digital Rupee will have a fixed value and is also considered a legal tender in India. As a part of the pilot program, RBI has issued a license to four banks - State Bank of India (SBI), ICICI Bank, Yes Bank and IDFC First Bank - which can currently issue digital Rupee in India. Users will be able to buy the digital Rupee from the official app or website from these four designated banks.

Similarly, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will soon be able to distribute digital Rupee in India. Digital rupee can be shared with a friend or family just like a cryptocurrency. The digital Rupee can be stored just like one store money on a Paytm wallet, which can be used for all sorts of transactions.

Unlike physical rupee, digital Rupee does not require any bank account to transact. Users won’t be able to withdraw the digital rupee in the form of physical currency. However, the digital Rupee can be converted into cash via commercial banks.