As per the RBI, Central Bank Digital Currency (CBDC) is a digital currency issued by the central bank. CBDC (which in India is referred to as “e-Rupee”) is substantially no different from banknotes, but being digital, it is likely to be easier, faster, and cheaper. This move from RBI will create awareness about CBDCs in public and the planned features of the digital Rupee in India.
Learn more about the digital rupee on RBI’s official website.
The pilot project will be launched in four cities, i.e. Bangalore, Bhubaneswar, Mumbai, and New Delhi in collaboration with leading banks like ICICI, HDFC, SBI, Yes bank, etc.
How will e-Rupi work?
Users can save funds in their wallets and spend them on any purchases. In order to save funds in the wallet, there will be a separate app that will be launched. Meanwhile, banks also can integrate the wallet into their existing or new app for the same. As of now, you can find the e-Rupi app launched by the below-mentioned banks in the play store
- Canara Bank
- ICICI Bank
- IDFC Bank
- Indian Bank
- Yes Bank
It’s recommended to check all the details about the app, and how the digital rupee works, and contact your bank directly for any clarification needed to avoid any inconvenience.
Few points to be noted
Pay without a Bank account: Unlike UPI transactions, e-Rupi wallets do not require a bank account. The digital payment will take place with the retail CBDC and without a bank. Ultimately this will be a transfer of digital rupee from one wallet to another without any intermediary bank.
RBI-Backed: Digital rupee or CBDC is operated and backed by the RBI and does not require any physical form as currency notes.
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Anonymity: In UPI payments, and net banking transactions, banks will be able to track or trace these easily. However, this is not the case in e-Rupi wallets. As cash transactions are between only two parties, e-Rupi wallet transfers are only between two wallets. Since banks have no involvement in e-Rupi wallet transfers these payments are anonymous in nature.
Real-fast transactions: e-Rupi wallet transfer will be fast, which can be useful in cross-border remittance transfers. Though infrastructure should be built before using this feature in foreign countries, it can help in reducing the time taken for cross-border transactions. CBDC facilitates instant settlement and secure payment systems made in blockchain technology.
Transactions without a smartphone: Besides the app, wallet features, e-Rupi can be shared as a voucher via SMS or QR code which can be accessed without having a smartphone. This will help in remote areas with a poor internet connection and less exposure to smartphones
Stay tuned for further updates from RBI or your bank for more information on this. Also, only check reliable sources for updates.