Digital rupee can change the way of doing business: RBI

The trial run of digital rupee has been started in the country. This is likely to reduce the cost of transactions. The Reserve Bank of India (RBI) says that this can lead to a big change in the way of doing business. RBI is among the few Central Banks in the world that have started the Central Bank Digital Currency (CBDC) project.

RBI Governor Shaktikanta Das Told, “This is a great opportunity in the history of our country’s currency. Efforts will be made to launch the CBDC very soon.” He informed that the trial run of digital rupee for the retail segment will be launched by the end of this month. RBI has started trial for wholesale segment. Das also announced digitization of Kisan Credit Card loan next year. Its trial project was launched in September in select cities of Madhya Pradesh and Tamil Nadu. In this, Union Bank of India and Federal Bank are associated as partner banks.

E-Rupee is likely to make the interbank market more efficient. Apart from SBI, Bank of Baroda, Union Bank of India, ICICI Bank, Kotak Mahindra Bank, HDFC Bank, Yes Bank, IDFC First Bank and HSBC are included in its trial. RBI has been considering the pros and cons of CBDC for the past few months. Earlier, RBI had expressed opposition regarding cryptocurrencies.

In this year’s budget, the central government has decided to cbdc announced the launch of CBDCs can be placed into two categories – general purpose or retail (CBDC-R) and wholesale (CBDC-W). The retail CBDC will be made available to all, while the wholesale CBDC will be accessible to select financial institutions. CBDC is a blockchain-based payment solution, which is controlled by the Central Bank. It works like cryptocurrencies but unlike cryptocurrencies, CBDCs do not have the volatility and other risks. Finance Minister Nirmala Sitharaman had said that CBDC will increase payment options for people. The central government hopes that this will also help in meeting its goal of increasing financial inclusion.

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