What is RBI Digital E – Rupee? RBI CBDC Pilot Project Launch ?
Digital Rupee is a rupee launched by the Reserve Bank of India, which cannot be seen or touched but can be transacted.
According to the Central Bank Digital Currency (CBDC) concept note, digital currency is being defined as a legal tender issued by the RBI.
Digital Rupee can also be called electronic rupee or e-rupee. Also its name is Central Bank Digital Currency ie CBDC. The digital rupee will also have the same value as the physical rupee.
Features of Digital Rupee ?
CBDC is a currency issued by the central bank under monetary policy.
When we used to deposit our money in banks, it was the liability of the bank, but the digital rupee would be the liability of the direct central bank.
It will be accepted by all citizens, entrepreneurs, government agencies etc.
CBDC can also be converted into physical currency.
It has been made under legal tender, for which customers will not need a bank account.
Types of CBDC :-
This digital rupee is divided into two parts.
Retail (R-CBDC) – Under R CBDC, all citizens of India will be able to use Digital Rupee and it will also be available to all citizens.
Wholesale (W-CBDC) – W CBDC is created only for a few selected financial institutions. Which can only be used by the wholesaler.
What is a CBDC Pilot Project? (Digital Rupee Pilot Project)
RBI had talked about launching digital currency at the time of the budget itself. And on 1 November 2022, the Central Bank fulfilled its promise. At present, the Central Bank has only launched a pilot project of Wholesale CBDC. Under which 9 banks of public and private sectors have been included.
Initially, this digital currency can be used only in wholesale transactions. But the central bank has also told that the pilot project of retail CBDC will also be launched in the coming 1 month.
This CBDC pilot project means that we will be able to transact in electronic forms just as we do physical transactions of money now and this money will be under the supervision of the central bank.
At present, only a few people can use this digital currency, but in the coming time it will be able to be used by all citizens of India.
Which banks are involved in the Digital Rupee Wholesale Pilot Project?
The central bank has selected a total of 9 banks for this wholesale pilot project. Some of the names of these banks are as follows –
- State Bank Of India
- Bank Of Baroda
- Union Bank of India
- HDFC bank
- ICICI Bank
- Kotak Mahindra Bankq
- Yes Bank
- IDFC First Bank
- HSBC Bank.
How will the Digital Rupee be used? (Use of Digital rupee)
That we told you that at this time CBDC is to be used only for wholesale transactions. RBI has said that Digital Rupee will be used for the purchase and sale of government securities. But it will become widespread within 1 month.
You will be able to keep this digital currency in your mobile wallet and use it in normal transactions. That is, it will be used in everyday transactions and payment will be done from mobile itself.
If you have to get this digital currency exchanged in your currency, then you can do that too. Till now the rupee has not been linked with UPI, but preparations are also going on to link it with UPI in future.
How was Digital Rupee built on the basis of Blockchain technology? (Technology behind Digital Rupee)
Just as bitcoin or other digital coin is based on blockchain technology, similarly this digital currency is also made from blockchain technology. As you know, Cryptocurrency based on Blockchain is absolutely safe, that’s why it is also made by Blockchain technology so that it can be safe and beneficial for all citizens.
What is the purpose of launching RBI CBDC? (Objective of RBI CBDC)
- The biggest objective of launching RBI CBDC is that there will be no need to convert currency into different forms and payments can be made on the basis of existing payment systems.
- The central bank believes that this will strengthen India’s digital economy and also make the payment system more efficient.
- This will result in minimum cash transactions and development of digitization.
- Transactions can be done easily abroad also.
- This will protect the money of a common man and make any transaction easy.
What are the benefits of Digital Rupee? (Benefits of Digital Rupee)
This CBDC has several advantages which are as follows -:
- Due to this digital currency, the cost of printing notes to RBI will be reduced.
- Due to this, corruption will also be reduced significantly, because all the payments will be in the eyes of the government.
- Through this, it will be easier for the government to make budget and economic planning.
- If you use digital currency then you will not need to create any kind of account.
- Earlier your money was deposited in the bank, but digital currency will be direct central bank’s liability, so that your money will be safe.
- This digital rupee will also reduce the transaction cost of all citizens along with the government.
Cryptocurrency vs Digital Rupee :-
- There is a big difference between crypto currency and digital currency.
- Cryptocurrency is run by a private entity, which no one monitors. But the digital form will remain in the eyes of the government and the government will monitor it. So that citizens will not have to bear any kind of risk.
- People who invest in cryptocurrencies are often exposed to risk or risk of losing money, but nothing like that will happen in a digital cap.
- Crypto currency is a volatile currency, but the digital rupee will be a stable currency as it will have the same value as the rupee.
- Crypto currency cannot be converted into physical currency, but digital currency can also be converted into physical currency.