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The Reserve Bank of India (RBI) has announced the launch of the first pilot for the retail digital Rupee (e₹-R), scheduled to commence on December 1, 2022. This pilot follows the RBI’s earlier press release dated October 31, 2022, which indicated that the retail digital rupee initiative would begin within a month.
The pilot will operate in a closed user group (CUG) consisting of selected customers and merchants. The e₹-R will take the form of a digital token representing legal tender, issued in denominations similar to existing paper currency and coins. Distribution will be through participating banks, and users will transact via digital wallets installed on mobile devices. Both Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions will be supported, with payments to merchants facilitated through QR codes.
The e₹-R is designed to retain features of physical cash, including trust, safety, and settlement finality. Like cash, it will not accrue interest and can be converted into other forms of money, such as bank deposits. The pilot aims to test the robustness of the digital rupee creation, distribution, and usage in real time, with learnings from this phase informing future enhancements and applications.
Eight banks have been identified for phase-wise participation. The first phase includes State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank across four cities: Mumbai, New Delhi, Bengaluru, and Bhubaneswar. Subsequently, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will join, with the pilot expanding to cities including Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. The pilot may be further expanded to include more banks, users, and locations as needed.
[RBI]