Mumbai, November 29: On Tuesday, the Reserve Bank of India announced that it will be launching the first pilot for retail digital Rupee on December 1. As per reports, the first pilot will cover select locations in closed user group (CUG) and comprise of participating customers and merchants. The retails digital rupee (e₹-R) is said to be in the form of digital token and will represent the legal tender.

According to reports, the first pilot for the retail digital rupee (e₹-R) will see four banks including SBI and ICICI Bank's participation. Earlier in the month, the RBI had launched the first pilot in the digital rupee in the wholesale segment. Reportedly, the retail digital rupee (e₹-R) will be issued in the same denomination as the paper currency and coins. Demonetisation: No New Rs 2,000 Notes Printed From 2019–2022, Says RTI Reply.

What Is CBDC or India’s Digital Rupee?

According to the RBI, the Central Bank Digital Currency Retail or retail digital rupee (e₹-R) is a legal digital tender. In simple terms, the digital rupee can be exchanged similar to the existing currencies. The digital rupee or CBDC will also be accepted for payments.

The CBDC, which is also known as the e₹-R or the digital rupee is a new currency issued by the Reserve Bank of India. The CBDC or the e₹-R is similar to the bank notes and is expected to be used for digital transaction so that it facilitates ease of use. If reports are to be believe, the digital rupee is Reserve Bank of India's "accepted version of cryptocurrencies". Reserve Bank of India Retains Key Lending Rate During First Monetary Policy Review of FY23.

Quick Facts About Digital Rupee

  • The digital rupee or CBDC is not a commodity or claims on commodities or digital assets

  • CBDC is a digital portrayal of paper currency issued by the Central Bank i.e. RBI.

  • The digital rupee can be exchanged for cash

  • Central banks will issue digital rupee and also govern and manage its asset

  • A legal tender, digital rupee or CBDC can be used to purchase goods and services

  • All Indian citizens will be able to use digital rupee once RBI starts its circulation

During the Union Budget 2022-23, Finance minister Nirmala Sitharaman had annunced the creation of CBDC, which is known as the digital rupee. Releasing a note on the digital currency, the RBI had said, "A CBDC is a 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."

(The above story first appeared on LatestLY on Nov 29, 2022 06:52 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).