The Reserve Bank of India (RBI) has officially launched the first pilot project of the country’s digital currency, the Digital Rupee (e) or e-rupee. The pilot is currently focused on wholesale, with a retail sector pilot set to begin within the next month.
The pilot is for the wholesale segment (inter-bank market) and will be used for settling secondary-market transactions in government securities. RBI believes that the e-Rupee’s usage will make the inter-bank market more efficient.
On the first day, bonds worth crores were traded using this new e₹. There are nine government and private banks that participated in the trade. State Bank of India, Union Bank of India, Bank of Baroda, Kotak Mahindra Bank, HDFC Bank, ICICI Bank, IDFC Bank, HSBC Bank, and Yes Bank are the identified banks that participated.
This pilot will help RBI learn more about the Digital Rupee and possibly do a roll-out for the retail segment. As promised, the rollout for the retail segment is planned within a month in select locations in closed user groups having merchants and the customer.
Jaya Vaidhyanathan, CEO, BCT Digital, says: “RBI’s commencement of the pilot of the digital rupee marks appreciable progress in the journey towards digital payments. While experts were wondering when India – the world’s fifth largest economy – would start in this regard, the RBI, as usual, has not disappointed.”
The initiative has started in the low volume, a high-value wholesale (interbank) segment from where learnings would be used to roll out reliable, built-to-scale retail payments, she added.
A successful pilot and, by extension, a full rollout of the digital rupee is expected to boost the reach of payment and financial needs of a broader category of users while ensuring transparency and low operational cost, and in this regard, it is encouraging to witness the RBI’s support for innovation in creating a world-class, future-ready digital ecosystem
“We encourage mass adoption of blockchain and crypto and wish great success to all such projects done by policymakers. India’s digitally skilled talent potential for Web3 and favourable policies will encourage a faster pace of growth in Web3 adoption in the future,” a Binance spokesperson said. The initiative started in the low volume, a high-value wholesale (interbank) segment from where learnings would be used to roll out reliable, built-to-scale retail payments.