The Reserve Bank of India (RBI) has embarked on a Digital Rupee pilot project with a small number of participants. Eight banks have been chosen by the Central bank to take part in a two-phase implementation of the project.
The digital currency in the form of tokens issued by the RBI are equivalent to legal paper and coin cash and can be used to represent the retail digital rupee.
The E-currency will be issued by the RBI in the same denominations as paper money and coins, and banks will distribute the Digital Currency in the manner similar to that they use for distribution of physical currency.
Users can have transactions with a digital wallet on mobile phones and other devices, similar to other digital wallet apps like PhonPe. Paytm, G-pay. The digital currency transactions can only be made through the digital wallets provided by banks taking part in the RBI’s digital rupee scheme.
The apps will also be circulated through the participating banks. Through a digital wallet provided by the collaborating banks and kept on users’ mobile phones or devices, users will be able to conduct transactions with e-Rupee.
In phase one, the State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank will participate from four different locations across the nation.
Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will be added in the second phase.
Mumbai, New Delhi, Bengaluru, Bhubaneswar, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla will be included in the pilot phase.