Digital Rupee: RBI To Launch Pilot For Retail CBDC, e₹-R, On December 1

A total of eight banks and four cities have been identified for the first e₹-R pilot.

Digital Rupee for retail, denoted by e₹-R, will be introduced as part of a pilot by the Reserve Bank of India (RBI) on December 1. This comes a month after the regulatory body launched the Digital Rupee for wholesale (e₹-W) in India on November 1. The newly launched e₹-R and the e₹-W are two variants of India's own central bank digital currency (CBDC). For those unaware, a CBDC is a digital coin issued by a nation's central bank — RBI in this case — and carries the same value as its fiat counterpart. Unlike cryptocurrencies, CBDCs aren't anonymous and their values don't fluctuate either (in relation to a country's fiat currency). 

In a press release, the RBI announced that the e₹-R pilot will be rolled out in select locations among a "closed user group" that will comprise customers and merchants. 

How will e₹-R be used?

The e₹-R will be issued in the same denominations as the fiat rupee is currently issued in paper currency and coins. It will be issued via banks, the RBI clarified.  

Users can store e₹-R in digital wallets, and can access them via digital devices such as their phones. The e₹-R will support both person-to-person (P2P) and person-to-merchant (P2M) transactions. 

If a user wishes to make payments to a merchant using Digital Rupee, they can use QR codes at merchant locations to do so, just like we make payments using Google Pay or Paytm at stores. 

The e₹-R will not earn any interest and can be converted to other forms of money as needed, the RBI clarified. 

As always, this pilot will test the "robustness" of the e₹-R implementation process in real-time, the RBI said, adding that "different features and applications of the e₹-R token and architecture will be tested in future pilots, based on the learnings from this pilot."

Which banks and cities will participate in e₹-R pilot?

A total of eight banks have been identified for the first e₹-R pilot, namely, State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in four cities initially, with Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank joining in later. 

The pilot will initially be rolled out in four cities — Mumbai, New Delhi, Bengaluru, and Bhubaneswar. The pilot will later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

"The scope of the pilot may be expanded gradually to include more banks, users and locations as needed," RBI said.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.