In its annual report 2022 - 23, the Reserve Bank of India RBI said in FY 24 it wants to expand the ongoing pilot of the Central Bank Digital CurrencyBank Digital Currency CBDC and incorporate various use cases and features in 2023 - 24.
In its annual report, the RBI said: During 2023-24, the Reserve Bank of India RBI aims to expand the ongoing pilots in CBDC-Retail and CBDC-Wholesale by incorporating various use cases and features. The pilots were followed by the issuance of a concept note on CBDC to create awareness about CBDCs in general and the expected features of e in particular, the annual report said.
The RBI froze the digital Rupee in 2022, which is India's very own CBDC and an electronic form of sovereign currency. The central bank had already proposed to introduce two versions of the digital rupee, i.e. CBDC-Wholesale CBD-W and CBDC-Retail CBDC-Wholesale is for limited access to select financial institutions, while CBDC-Retail can be used by all including the private sector, non-financial consumers, and businesses.
The pilot program of the wholesale digital Rupee segment began on November 1, 2022. The pilot's purpose is to deal with secondary market transactions in government securities G-secs. The pilot has been announced for CBDC-Retail on December 1, 2022. The retail e-Rupee has been launched in denominations of 50, 1, 2, 5, 10, 20, 50, 200, 500, and 2000, and wholesale e-Rupee does not envisage any denomination, the annual report said.
In the initial phase, the customers were asked to transact using the digital rupee through a digital wallet offered by participating banks in the pilot programme. On an Android smartphone, the digital wallet can be saved.
The RBI said e-Rs notes can be held or used to carry out transactions, similar to how currency notes can be used in physical form.
The central bank had previously announced that retail digital Rupee would be distributed through the two-tier model. The RBI will issue and redeem e-Rupee, while the distribution and payment services will be delegated to the bank.
The pilot project involved four banks such as IDFC First Bank, ICICI Bank, Yes Bank, and State Bank of India. Four other banks - the Bank of Baroda, Union Bank of IndiaBank of India, HDFC Bank and Kotak Mahindra Bank - were also added.
At present, five more banks, including Punjab National Bank, Canara Bank, Federal Bank, Axis Bank and IndusInd Bank, are in the process of joining the pilot.
The pilot of the retail e-Rupee was first introduced in Bhubaneswar, New Delhi, Bengaluru, and Mumbai, where users and merchants were added to a closed user group CUG for its easy use.
Afterwards, more locations were added to the list, including Ahmedabad, Chandigarh, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.