SBI, ICICI, Yes Bank & BOB Are Among Eight Banks To Start Trial For RBI’s Retail CBDC From Dec 1
After wholesale CBDC in October, RBI all set to launch retail CBDC on December 1, 2022
The Reserve Bank of India (RBI) has announced the launch of the first pilot for the retail central bank digital currency (CBDC) on December 1, 2022.
The retail digital rupee is also known as (e₹-R).
The RBI has identified eight banks for phase-wise participation in this pilot. The first phase will begin with four banks, namely, the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. Four more banks, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently.
The pilot would initially cover four cities, Mumbai, New Delhi , Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The scope of pilot may be expanded gradually to include more banks, users and locations as needed,” the RBI said in a press release.
According to the RBI, the pilot would cover select locations in closed user group (CUG) comprising participating customers and merchants. The e₹-R would be in the form of a digital token that represents legal tender.
“It would be issued in the same denominations in which paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations,” the RBI said.
RBI further noted that India’s retail CBDC would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks.
Earlier, on October 31, 2022, the RBI had announced the first pilot in the CBDC project through the wholesale segment (e₹-W).