The Reserve Bank of India (RBI) is all set to launch its first pilot, for retail digital rupee (e₹-R), in select locations in closed user group (CUG) comprising participating customers and merchants on December 1.
In an official release, the central bank said that the e-rupee would be in form of a digital token, and it would be issued in the form that paper currency and coins are currently issued.
The e-rupee would be distributed through intermediaries such as banks. Users will be able to transact with it through a digital wallet offered by the participating banks and stored on mobile phones or devices, the RBI said.
The e-rupee would not earn any interest and can be converted to other forms of money, like bank deposits, as and when needed.
RBI will later test other features and applications of the e-rupee, based on the learnings from this pilot. "The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time," the RBI said.
The pilot is set to be launched in two phases, four banks including SBI and ICICI Bank will initially participate in the first phase across four cities in the country, while Bank of Baroda, Union Bank of India, and a couple of others will also join the pilot at a later stage across more cities.
The RBI said it may expand the scope of the pilot gradually to include more banks, users and locations as needed.