Trial of digital rupee started, 9 banks included in RBI’s project

The trial run of digital rupee has started in the country from the beginning of this month. The Reserve Bank of India (RBI) has started a trial run for the wholesale segment. Nine banks including the country’s largest lender State Bank of India (SBI) have been involved in this project. RBI said that the use case in the trial would be for settling secondary market transactions in government securities.

E-Rupee is likely to make the interbank market more efficient. RBI has Told That this Central Bank Digital Currency (CBDC) will reduce the transaction cost. 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. The launch of e-Rupee for the retail segment is planned in a month at select locations. RBI has been considering the pros and cons of CBDC for the past few months. Earlier, RBI had expressed opposition regarding cryptocurrencies.

The central government has announced the launch of CBDC from the financial year 2022-23 in this year’s budget. Announcement It was 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 the people of the country. The central government hopes that this will also help in meeting its goal of increasing financial inclusion. The development of CBDC is not being interfered with by the government and full responsibility has been given to RBI. Some countries have started work on plans to launch CBDCs. The Federal Reserve in the US is considering launching a CBDC. Russia has started testing its CBDC called the Digital Ruble.

(This news has not been edited by NDTV team. It is published directly from syndicate feed.)