RBI’s CBDC Pilot In Retail Has Blockchain Tech Components: Centre Tells Rajya Sabha
The Reserve Bank of India (RBI) has issued a concept note on Central Bank Digital Currency (CBDC) on 7 October 2022 which can be accessed at RBI’s website, said Pankaj Chaudhary, Union Minister of State for Finance
The Central Bank Digital Currency (CBDC) pilot launched by the RBI in the retail segment has components based on blockchain technology, said Pankaj Chaudhary, Union Minister of State for Finance in a reply to a question in Lok Sabha on Monday. Chaudhary said that the bank has launched pilots of CBDC in both the wholesale and retail segments.
“The digital rupee (pilot in the whole segment)- Wholesale launched on 1 November 2022. This is expected to make the interbank market more efficient,” he said. Talking about the digital Rupee-Retail (e₹-R), the minister added that it was launched on 1 December 2022 in the pilot retail segment comprised of participating customers and merchants.
A total of eight banks have been finalised for phase-wise participation in the retail pilot project. In the first phase, the banks included are the State Bank of India (SBI), the ICICI Bank, the Yes Bank and the IDFC First Bank. The rest four banks are the Bank of Baroda, the Union Bank of India, the HDFC Bank and the Kotak Mahindra Bank.
Chaudhary further notified that e₹-R is the kind of digital token that will represent legal tender and will be issued in the same denominations as the paper currency and coins. Furthermore, the distribution will be made through financial intermediaries, i.e., the banks. Transactions can be carried out by both person to person (P2P) and person to merchant (P2M). Like cash, the CBDC will not earn any interest and can be converted to other forms of money, like deposits with banks, he added.