RBI to launch digital currency for inter-banking transaction by Oct

Pilot of wholesale CBDE, known as digital rupee-wholesale (e-W) was launched in Nov 2022 with use case being limited to settlement of secondary market transactions in government securities

RBI Digital Currency

New Delhi: The Reserve Bank of India (RBI) is likely to launch the pilot of Central Bank Digital Currency (CBDC) for transactions for interbank borrowing or call money market by this October, the Central bank’s executive director Ajay Kumar Choudhary said on Sunday.

Speaking on the sidelines of the G20 Summit here, Choudhary said, “The RBI will introduce the wholesale CBDC in the call market either this month or next month.”

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Officials said that the RBI picked nine banks-State Bank of India (SBI), Bank of Baroda (BoB), Union Bank of India (UBI), HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank, and HSBC–for its pilot project for wholesale CBDC.

The pilot of wholesale CBDE, also known as the digital rupee-wholesale (e-W) was launched in November last year with the use case being limited to the settlement of secondary market transactions in government securities.

Union finance minister Nirmala Sitharaman had announced introduction of CBDC during the presentation of annual budget for 2022-23 and said that certain necessary amendments would be carried out in the RBI Act, 1934. The Central government has got these amendments approved by the Parliament through the Finance Bill 2022.

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Besides, the RBI has also launched the retail version of CBDC (e-R) on December 1, last year. The e-R is in the form of a digital token that represents legal tender, which is being issued in the same denominations as the paper currency and coins. Officials of the RBI said that e-R is being distributed through financial intermediaries like banks. Users can transact with e-R through a digital wallet offered by the participating banks.

The Central bank has taken various strategies to apprise the people about significance of the digital currency. It also showcased various digital initiatives in the financial sector at the exhibition pavilion during the G20 Summit. These include Public Tech Platform (PTP) for Frictionless Credit, CBDC, UPI One World, RuPay On-The-Go, and Bharat Bill Payment System.

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