RBI issues Rs1.71 crore of digital rupee to 4 banks as retail pilot project starts

2 Dec 2022 , 01:42 PM

The Reserve Bank of India (RBI) launched a pilot project for central bank digital currency (CBDC) in the retail sector on Thursday, issuing Rs1.71 crore to four participating banks based on their indents.

For the first phase of the pilot, the central bank has identified four banks – State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank – in four cities: Mumbai, New Delhi, Bengaluru, and Bhubaneswar. One private sector bank presented the highest indent.

The pilot kicked off with Rs1.71 crore of digital currency but depending on user demand and bank liquidity requirements, the token indent, and issuances to banks will continue to evolve rapidly, according to sources. As demand from banks increases over the next few days, the central bank will create more digital rupees.

In the coming days, RBI intends to involve 50,000 merchants and customers.

The pilot will further be expanded to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. Four more banks will join the pilot namely, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. In the next 2-3 weeks, another four banks will join the pilot.

Customers will be able to place a request for digital rupees via their digital wallet in their mobile app provided by their banks, and the requested amount will be credited to their digital rupee wallet. Customers can use digital rupees to pay individuals and merchants.

According to the RBI, the retail pilot project, which will take place in closed user groups, will take the form of a digital token that represents legal tender. The digital rupee is issued in the same denominations as paper money and coins.

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