India would carry out the pilot testing of its digital currency e₹-R from December 1st, 2022 across four cities namely Mumbai, New Delhi, Bengaluru, and Bhubaneswar, according to the press release shared by the Reserve Bank of India.
The scope of the pilot may be expanded gradually to include more banks, users, and locations as needed, according to the P.A.
Eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks, namely State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in the four mentioned cities.
The remaining others would join this pilot subsequently, the apex bank stated.
The pilot would cover select locations in closed user groups [CUG] comprising participating customers and merchants. Through a digital wallet provided by the collaborating banks and kept on users’ mobile phones or devices, users would be able to conduct transactions with e₹-R.
“Transactions can be both Person to Person [P2P]and Person Merchant [P2M)] Payments to merchants can be made using QR codes displayed at merchant locations.”
Like cash, the digital token will not earn any interest and can be converted to other forms of money, like deposits with banks, per the blog.
As reported by TronWeekly, India’s central bank launched the pilot program for its virtual currency, allowing a select group of banks to settle secondary-market trades in government securities.
India’s RBI Continue Its Hard Stance Towards Cryptocurrency
India has been developing its CBDC plans for a while. Across the country, opinions on cryptocurrency are divided. The Reserve Bank of India has adopted an aggressive stance that ranged from a total prohibition on digital assets to imposing the draconian 30% tax and 1% TDS.
On CBDC, RBI previously stated in a concept note that it “will provide the users the same experience of dealing in currency in digital form, without any risks associated with private cryptocurrencies.”
Retail CBDC will initially be made available as a stand-alone product once it is deployed. However, consumers may be prompted to download an application or digital wallet that contains the e-rupee once the new currency is subsequently integrated with current online banking services.
The top bank urged customers to request specific denominations of e-rupees from their bank, which can then be put into each one of their individual CBDC wallets.