Central Bank Digital Currency (CBDC) or rupee cannot be converted into cash.
Rupee will be issued by the Reserve Bank of India (RBI) only against bank deposits, i.e.
RBI will issue e-Rupee only against bank deposits and allow digital currency conversion into cash.
Addressing an event at the Indian Merchants Chamber, RBI’s FinTech Department Chief General Manager Anuj Ranjan said that the pilot project had made satisfactory progress in a close consumer group.
According to the report, the number of users is increasing gradually. Anuj Ranjan said that the apex bank would bear the cost related to the rupee, as it is part of RBI’s liabilities.
Cashless payment will gain momentum.
Banks like Yes Bank have already made digital wallets available for download on Apple App Store and Google Play Store.
Several companies, such as Reliance Retail, Natural Ice Cream and Oil Marketing, have also agreed to accept e-Rupee payments.
This digital Currency of the Reserve Bank has been named Central Bank Digital Currency (CBDC).
The central bank has adopted this method to make Currency digital and to speed up cashless payments.
Two categories of Digital Currency
The Reserve Bank has divided digital Currency into two categories, CBDC-W and CBDC-R.
CBDC-W stands for Wholesale Currency, and CBDC-R stands for Retail Currency.
People can do Digital Rupee transactions to Person (P2P) and Person to Merchant (P2M).
E-Rupee will work like a digital token. In other words, CBDC is the digital form of currency notes issued by RBI.
Benefits of Digital Currency
- Helpful in strengthening the digital economy.
- People will not need to carry cash in their pockets.
- Like a mobile wallet, it will have the facility to make payments.
- You can easily convert the digital rupee into bank money and cash.
- There will be a reduction in the cost of sending money abroad.
- The value of the e-rupee will also be equal to the existing Currency.
Retail Digital Rupee
The pilot of the Retail Digital Rupee was successfully launched in the country on December 1.
Digital Rupee was launched in Delhi, Mumbai, Bengaluru and Bhubaneswar in the first phase.
Digital Currency was made available through four banks in these cities.
The first phase was launched through the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country.
