MUMBAI: The Reserve Bank of India's first pilot for retail e-rupee, its version of the central bank digital currency (CBDC) will be launched on Dec. 1, it said in a statement on Tuesday.
The pilot would cover select locations in a closed user group comprising participating customers and merchants, the central bank said. "It would be issued in the same denominations that paper currency and coins are currently issued," the statement added. . It would be distributed through intermediaries such as banks," The RBI has been running a pilot of the wholesale e-rupee since Nov. 1, with nine banks transacting in government securities using the e-rupee.
Users will be able to transact with e-rupee through a digital wallet offered by the participating banks and stored on mobile phones or devices, it said.
The e-rupee would not earn any interest and can be converted to other forms of money like bank deposits as and when needed.
"The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real time," the RBIsaid.
RBI would later test other features and applications of the e-rupee, based on the learnings from this pilot. The pilot would be launched in two phases, with State Bank of India, ICICLE Bank, Yes Bank and IDC First Bank participating in phase 1 across four cities in the country.
Bank of Baroda, Union Bank of India, HDFC Bank and Kobak Mahindra Bank will also join the pilot at a later stage across more cities. "The scope of pilot may be expanded gradually to include more banks, users and locations as needed," the RBI said.