ugc_banner

India: RBI to pilot launch e-rupee for specific cases, releases concept note

New Delhi, IndiaEdited By: Nishtha BadgamiaUpdated: Oct 08, 2022, 12:57 AM IST
main img
Reserve Bank of India. Photograph:(Reuters)

Story highlights

Furthermore, the central bank has broadly defined CBDC as the legal tender, issued by the central bank in a digital form. They indicated that it is akin to sovereign paper but in a different form, exchangeable at par with existing currency and will be accepted as a medium of payment, legal tender and store of value.

On Friday, the Reserve Bank of India (RBI) launched a concept note on Central Bank Digital Currency (CBDC) and indicated that it will also later start a pilot launch of the e-rupee for specific cases. The concept note was released with the aim to create awareness about this type of currency in general and the planned features of the Digital Rupee or e-rupee. 

“The purpose behind the issue of this concept note is to create awareness about CBDCs in general and the planned features of the Digital Rupee (e₹), in particular. It explains the objectives, choices, benefits, and risks of issuing a CBDC in India. The Note also seeks to explain Reserve Bank’s approach towards the introduction of the CBDC,” said the RBI in a statement. 

Furthermore, the central bank has broadly defined CBDC as the legal tender, issued by the central bank in a digital form. They indicated that it is akin to sovereign paper but in a different form, exchangeable at par with existing currency and will be accepted as a medium of payment, legal tender and store of value. These CBDCs will also appear as a liability on a central bank’s balance sheet, the RBI said. 

They added, “The e-rupee will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money.” 

ALSO READ: Rupee hits record low of 82 against US dollar after OPEC+ production cut plan

As and when the scope of such pilot launches expands, the RBI will continue to convey its specific features and benefits every now and then, said the central bank. In the Union Budget for 2022-23, Finance Minister Nirmala Sitharaman previously said the RBI will roll out a digital currency equivalent to the rupee in the current financial year. 

RBI added, “CBDC, being a sovereign currency, holds unique advantages of central bank money viz. trust, safety, liquidity, settlement finality and integrity.” The RBI also believes that the Digital Rupee system will bolster India’s digital economy and make monetary and payment systems more efficient while contributing to financial inclusion. 

According to the statement, the RBI has also said that the use of the offline feature in CBDC would help those in remote locations and make it available for more people while also benefiting at times when electric power or a mobile network are unavailable. 

Many countries like China, Ghana, Jamaica, and including countries in Europe have also recently launched their digital currencies. In 2019, Sand Dollar, a digital currency minted in the Bahamas was the first CBDC launched in the world. 

(With inputs from agencies)

 

WATCH WION LIVE HERE

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.