It also announced that the first pilot of Digital Rupee-Retail segment will be launched within one month
India’s first pilot project for Digital Rupee will begin Tuesday. Nine banks, including SBI and HDFC Bank, will issue the virtual currency to facilitate transactions in government securities.
“…The first pilot in Digital Rupee-Wholesale segment shall begin on November 1, 2022,” said the RBI in a statement titled “Operationalisation Central Bank Digital Currency-Wholesale Pilot (eRsW) Pilot”.
It also announced that the pilot in Digital Rupee-Retail segment will be launched within one month at select locations in closed user groups, which include merchants and customers.
According to the RBI, the pilot will be used for settlement of secondary market transactions in government bonds. This was the case starting Tuesday.
It stated that e?-W “is expected to make inter-bank markets more efficient.”
Settlement in central bank money would lower transaction costs because it pre-empts the need for settlement infrastructure or collateral to mitigate settlement risks.
The pilot project will involve nine banks: the State Bank of India (SBI), Bank of Baroda and Union Bank of India; HDFC Bank, ICICI Banks, Bank of Baroda, Union Bank of India; HDFC Banks, HDFC Banks, ICICI Banks, Kotak Mahindra Banks, Yes Bank, IDFC First Banks, and HSBC.
The cental bank stated that future pilots will focus on other wholesale transactions and cross border payments based upon the lessons from this pilot.
The RBI stated that CBDC was intended to complement existing forms of money, rather than replace them. It is also envisaged as an additional payment channel for users and not replace existing payment systems.
CBDC is a digital currency note issued by a central banking institution. CBDC is being explored by central banks around the world. However, each country has its own unique needs and the motivations behind it issuance.
The Government of India had made the announcement that the Digital Rupee would be launched in fiscal year 2022-23 in the Union Budget submitted to Parliament on February 1, 2022.
More than 60 central banks around the world have expressed an interest in CBDCs. There are a few pilots currently under way across wholesale and retail categories. Many others are still researching, testing and/or launching their CBDC framework.
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter, and Instagram.
