RBI likely to launch digital rupee pilot for interbank transaction by October

The pilot of the digital rupee was launched in Nov, 2022 with limited use case transactions of government securities

RBI likely to launch digital rupee pilot for interbank transaction by October

Sunday September 10, 2023,

2 min Read

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 October, Central Bank Executive Director Ajay Kumar Choudhary said on Sunday.

The pilot of the wholesale CBDC, known as the Digital Rupee-Wholesale (e-W), was launched on November 1, 2022, with the use case being limited to the settlement of secondary market transactions in government securities.

"The RBI will introduce the wholesale CBDC in the call market either this month or next month," Choudhary said on the sidelines of the G20 Leaders' Summit.

Reserve Bank of India, RBI

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The introduction of CBDC was announced in the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman and necessary amendments to the relevant section of the RBI Act, 1934, were made with the passage of the Finance Bill 2022.

The RBI picked nine banks—State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank and HSBC—for its pilot project for wholesale CBDC.

Besides, the central bank has already rolled out a pilot in the retail version of the CBDC (e-R) on December 1, 2022. The e-R is in the form of a digital token that represents legal tender.

It is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries like banks. Users can transact with e-R through a digital wallet offered by the participating banks.

The RBI is showcasing 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.