Digital Re pilot to be expanded to other banks, locations

In the annual report released on Tuesday, the central bank announced that the CBDC-Retail pilot would be expanded to include more locations and banks. The value of e-rupee in circulation stood at ₹16.39 crore at the end of March, according to the annual report.

In 2022, the Reserve Bank introduced its Central Bank Digital Currency in phases, with the launch of pilots for the Digital Rupee (e`) in the wholesale and retail segments. The pilots were preceded by the issuance of a ‘Concept Note’ on CBDC to create awareness about CBDCs in general and the planned features of e` in particular. CBDC-Wholesale is for restricted access to select financial institutions, while CBDC-Retail can be used by all, including the private sector, non-financial consumers, and businesses. The retail e-Rupee has been launched in denominations of 50 paise, 1, 2, 5, 10, 20, 50, 100, 200, 500 and 2000, while wholesale e-Rupee does not envisage any denomination, the annual report said.

In its concept note, RBI said, “broadly defines CBDC as the legal tender issued by a central bank in a digital form. It is akin to sovereign paper currency but takes a different form, exchangeable at par with the existing currency and shall be accepted as a medium of payment, legal tender and a safe store of value. CBDCs would appear as liability on a central bank’s balance sheet." The pilot project started with four banks, including State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Later four other banks, such as Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank, were added. Five more banks, including Punjab National Bank, Canara Bank, Federal Bank, Axis Bank, and IndusInd Bank, are in the process of joining the pilot.

The pilot of the retail e-Rupee was first introduced in Mumbai, New Delhi, Bengaluru, and Bhubaneswar, where customers and merchants were added to a closed user group for easy usage.