The Reserve Bank of India has launched the retail digital rupee (eRS-R) on a pilot basis in the country. Speaking on the first-of-its-kind digital currency in the country, per reports, RBI states that the pilot would encompass select locations in closed user groups (CUG) comprising participating customers and merchants.
Key insights:
The eRs-R would be a digital token that embodies legal tender. The Digital Rupee would be issued in similar denominations that paper currency and coins are at present issued and it would be circulated through intermediaries — banks.
Around eight banks have been selected for phase-wise partaking in this pilot program. The initial phase will commence with four banks, viz. State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in four cities. Four additional banks, viz. Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will join this pilot later. This will cover the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
Users will be able to transact with eRs-R via a digital wallet offered by the partaking banks and stored on mobile phones/devices. Transactions can be made via person-to-person (P2P) and person-to-merchant (P2M). Payments to merchants can be made using quick response (QR) codes exhibited at merchant sites.