NEW DELHI: On December 1, 2022, the Reserve Bank of India (RBI) will launch its first pilot project for retail digital rupees (ea,-R).
According to a statement released by RBI, the pilot would encompass a few sites in a closed user group (CUG) made up of participating consumers and business owners.
The ea,-R would take the shape of a digital token that represents legal tender. It would be distributed in the same denominations that coins and paper currency are now distributed in. It would be spread by means of middlemen, namely banks. For this pilot project's phase-by-phase participation, eight banks have been picked.
The first phase will begin with four banks namely State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in 4 cities across the country. Following that, this pilot will include the participation of four other banks: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.
Mumbai, New Delhi, Bangalore, and Bhubaneswar would be the first four cities the pilot proejct would cover. Later, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla would also be included.
According to the announcement, users will be able to conduct transactions using ea,-R using a digital wallet provided by the collaborating banks and kept on mobile phones or other devices. Both person-to-person (P2P) and person-to-merchant transactions are possible (P2M). QR codes that are displayed at retail places can be used to make payments to retailers.
The ea,-R would provide characteristics of actual money, such as trust, safety, and settlement finality. Like cash, it won't accrue interest and can be changed into other kinds of payment like bank deposits.
The pilot will assess the stability of the complete creation, distribution, and retail use of digital rupees in real time.Based on the lessons learned from this pilot, various aspects and uses of the ea,-R token and architecture will be tested in further pilots.
The scope of pilot may be expanded gradually to include more banks, users and locations as needed, the statement read.