The Reserve Bank of India Friday announced that the pilot launch of the e-Rupee, the digital counterpart of the Indian Rupee, will begin soon. The upcoming e-Rupee will be useful in specific cases, which will be a part of the pilot programme. The central bank has floated a concept note on the Central Bank Digital Currency (CBDC) to discuss key considerations for the digital Rupee. Also Read - Digital Rupee pilot for retail segment to commence on December 1
“As the extent and scope of such pilot launches expand, RBI will continue to communicate about the specific features and benefits of e-rupee, from time to time,” RBI noted in the concept note. E-rupee was first announced by Finance Minister Nirmala Sitharaman during her Budget 2022 speech in February as a legal alternative to the digital currency. As the pilot programme for the launch of the e-Rupee commences in India, here are five key things to know: Also Read - RBI launches the first pilot of Digital Rupee (e₹) for the wholesale segment: All details here
- E-rupee will be a legal digital currency issued and managed by the Reserve Bank of India. The e-Rupee is a Central Bank Digital Currency (CBDC) that has the same trade value as a sovereign currency. It will be exchangeable with the fiat currency on a one-on-one basis, according to RBI’s concept note.
- The Digital Rupee or e-Rupee will align with India’s monetary policy, which means its transactions will fall under the purview of RBI’s rules, such as deductions if any. It will appear as a liability on the central bank’s balance sheet.
- The central bank has noted that the e-Rupee will be recognised as a legal tender and a medium of payment. Citizens, enterprises, and government bodies will also be able to store the Digital Rupee just like the bank notes.
- Digital Rupee will be convertible against physical money and cash from banks. It will likely lower the cost of issuance of money and transactions since it eliminates the need for a physical form to exist.
- The Reserve Bank has said that the e-Rupee will act as a fungible legal tender for which holders would not need to have a bank account.