The Reserve Bank of India (RBI) announced on Tuesday that the first retail digital rupee or e-rupee or e₹ pilot will begin on December 1. To begin, the RBI has collaborated with four banks in Mumbai, New Delhi, Bengaluru, and Bhubaneswar. These banks are the State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Initially, the RBI stated that the pilot would only cover the closed user group (CUG) of participating customers and merchants.

According to the RBI, the e-Rupee is a type of digital token that serves as a legal tender. The digital Rupee, unlike cryptocurrencies, will proceed in the same denominations as paper currency and coins. The RBI explained that digital rupees, or e-Rupees, will be distributed to customers and merchants through intermediaries such as banks. Users will be able to transact with e-Rupees via a digital wallet provided by eligible banks. It will be present on their mobile phones or devices.


The central bank also confirmed that digital rupee transactions can take place between Person to Person (P2P) and Person to Merchant (P2M) (P2M). Users will be able to make e-Rupee payments using QR codes displayed at merchant locations, just like online transactions.

Banks Support

The central bank revealed that the digital rupee will inaugurate in stages. Mumbai, New Delhi, Bengaluru, and Bhubaneswar are among these cities. The RBI announced that four more banks will join the pilot. These include the Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.

Later, the service will be expanded to include Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla, among other Indian cities. The facility will eventually go to other parts of the country. The official rollout date announcement will be soon.

The RBI has been talking about introducing the digital Rupee for a long time and beginning December 1, some users will be able to make transactions using the e-Rupee. The central bank’s overarching goal this is to carry out a full-fledged launch of the CBDC in the near future.

There will be some technological and process challenges, and the RBI will want to iron out all of those details before introducing the CBDC in a non-disruptive manner, he said.

The central bank announced today that the pilot will test the robustness of the entire digital rupee creation, distribution, and retail usage process in real-time. Based on the results of this pilot, different features and applications of the e-R token and architecture will go through testing in future pilots.

RBI Governor Shaktikanta Das stated earlier this month that the RBI would follow up on the wholesale e-rupee pilot with a similar retail trial this month.

Digital Rupee

The Digital Rupee (e₹) or E-Rupee is a planned digital version of the Indian Rupee. It will work as a central bank digital currency by the Reserve Bank of India (RBI). The Digital Rupee was proposed in January 2017 and will be introduced in the fiscal year 2022-23. Further, the intention is to incorporate distributed ledger technology into Digital Rupee.

It will be uniquely identifiable and regulated by the Central Bank, just like banknotes. Further, RBI bears responsibility. Plans include both online and offline access. The RBI will introduce this for Wholesale (e₹-W) for interbank settlements with financial institutions. Digital Rupee for the Retail (e₹-R) for all kind of consumer and business transactions. CBDC will eliminate the 4,984.80 crore security printing cost borne by the general public, businesses, banks, and RBI.

CBDCs backed by the sovereign must promote non-anonymity in monetary transactions and financial inclusion through direct transfers. It must comply with national and international money laundering and economic terrorism laws. The RBI intended to begin CBDC trials in December 2021.

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