On 1 December 2022, the Reserve Bank of India (RBI) launched a digital rupee in 4 Indian cities. Residents of Mumbai, Bengaluru, New Delhi and Bhubaneswar can now use digital wallets provided by the partnering bank to exchange digital rupees.
Moreover, you can keep this wallet on mobile or other devices for online transactions. According to central bank’s guidelines, you can carry out digital rupee transactions with merchants and individuals.
RBI, or the central bank of India, has selected eight banks to take part in phase-wise e-rupee pilot program. State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank will comprise the first phase in the four cities mentioned above. Four other banks will join the pilot for the second phase soon.
These participating banks have launched their digital rupee app to make transactions more accessible. You should note that the e-rupee is a digital version of your cash or paper money and not a cryptocurrency. So, you can make transactions using QR codes displayed at shops or malls to pay with an e-rupee.
Take a look at the following points before you proceed with buying or making transactions with the digital rupee (e₹-R) pilot:
Though the Central Bank Digital Currency (CBDC) is different from cryptocurrency in all aspects, it can be compared with crypto in fields of benefits. One of the notable benefits of CBDC is that government bodies and other companies accept digital rupees as legal tender, means of payment, safe deposit, etc.
Let’s take a look at its benefits.
As per the central bank of India, two types of digital rupee will be launched in India, namely retail or general purpose (CBDC-R) and wholesale (CBDC-W). Non-financial consumers, private sectors, businessmen, etc., can use CBDC-R, while the use of CBDC-W is restricted to selected financial institutions such as interbank transfers.
Thus, RBI launches the digital rupee in India to offer a safe and hazardless digital experience during monetary transactions. Besides, it does not come with a risk of volatility. It is just a digital form of your own physical money.
Digital rupee is an electronic form of paper currency. It allows users to purchase and spend money digitally by scanning QR codes. The central bank of India launched the digital rupee for a risk-free transaction process.
You can buy digital rupees from the four banks that the RBI has licensed. They are the State Bank of India, Yes Bank, ICICI Bank, and IDFC First Bank. However, RBI will include some more banks in this pilot program in the recent future.
UPI is an interface where you can make transactions of your physical money. However, digital money is another form of paper currency which can be withdrawn from a bank account.
Yes, you can use the retail digital rupee or CBDC-R to shop from a store or mall with the QR code that accept a digital currency. You can store the digital money in your digital wallet and spend it through online transactions.
Digital money is your physical money in a digitalised form. So, you can make a transaction or send them to friends or family just as your physical currency. Both the person sending and accepting the digital money should have a digital wallet for the transaction.