The Digital Rupee Pilot in FinTech – Revolutionizing Finance in India

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The Digital Rupee Pilot in FinTech - Finance in India
The Digital Rupee Pilot in FinTech - Finance in India

Bytes of India’s FinTech Ecosystem

Digital Rupee (e₹) Pilot :
During the sidelines of the recent G20 Summit in India, “The RBI is set to launch the pilot of its Central Bank Digital Currency (CBDC) for interbank transactions or in the call money market either this month or next month” said the Central Bank, Executive Director, Ajay Kumar Choudhary on 10th Sep 2023.

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October 7, 2022:
The RBI has issued a concept note on CBDC. CBDC pilot components are based on Blockchain Technology. CDBC will not earn any interest.
Central bank proposed to introduce 2 versions of the digital rupee –

● CBDC – W (Wholesale):
Restricted access to selected financial institutions.
● CBDC – R (Retail):
For Private sector, Non-Financial consumers and businesses.

Source: https://indianstartupnews.com/news/rbi-likely-to-launch-digital-rupee-pilot-for-interbank-transactions-by-october

Source:
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1882883

November 1, 2022:

Launch of e-W (Digital Rupee e₹ – Wholesale)
The pilot of the Wholesale CBDC known as Digital Rupee – Wholesale (e-
W) was launched and limited to the settlement of secondary market transactions in government securities.


Union Budget 2022-23:
Finance Minister Nirmala Sitharaman announced the introduction of
CBDC and necessary amendments to the relevant section under the RBI Act 1934, with the passage of Finance Bill 2022.

Banks chosen by RBI for CBDC:
The RBI had chosen 9 Banks for the pilot project (CBDC).

● State Bank of India
● Bank of Baroda
● Union Bank of India
● HDFC Bank
● ICICI Bank
● Kotak Mahindra Bank
● Yes Bank
● IDFC First Bank
● HSBC

Source: https://www.livemint.com/economy/rbi-likely-to-launch-digital-rupee-pilot-for-interbank-transactions-by-october-report-11694335275867.html


December 1, 2022 :
Central bank has already introduced a pilot in the retail version of the CBDC
(e-R). It is in the form of a Digital token that represents legal tender. e-R launched within a Closed User Group (CUG), comprising the participating customers and merchants.


e-R transaction can be both

(i) Person to Person (P2P).
(ii)Person to Merchant (P2M).

It is issued as the mirroring denominations of the existing paper currency
and coins and distributed through financial intermediaries like banks. The
interaction is made from e-R through a digital wallet.


The RBI showcased various digital initiatives at the exhibition pavilion, in the financial sector, during the G20 Summit in India. These consist of

● Public Tech Platform (PTP) for Frictionless Credit.
● CBDC.
● UPI one world.
● Rupay On-The-Go.
● Bharat Bill Payment System.

Source:
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1882883
https://www.livemint.com/economy/rbi-likely-to-launch-digital-rupee-pilot-for-interbank-transactions-by-october-report-11694335275867.html

RBI is about to launch new features to popularize the CBDC. Those features
include,

● Allowing digital rupee transactions without network connectivity.
● Linking the e-rupee to India’s popular Unified Payments Interface
(UPI).

Retail CBDC transactions are about 18,000 per day on average which leads
us to achieve the RBI’s goal “one million-a-day by 2023 end”.
“Interoperability of UPI QR Code with digital rupee will remove friction, but
this will not drive adoption unless CBDC payments are incentivized,” said
Sharat Chandra, co-founder of India Blockchain Forum, an industry
collective.
“CBDC’s new and unique use cases such as its offline mode would facilitate
transactions without network connectivity”, said Akhil Handa, a top
executive at Bank of Baroda.


Source: https://zeenews.india.com/personal-finance/rbi-banks-plan-new-
features-to-boost-digital-currency-e-rupee-soon-2660769.html

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