RBI to Launch e-Rupee Pilot Today – The New Indian Express

By Express press service

NEW DELHI: The Reserve Bank of India’s sovereign digital currency will become a reality as soon as it launches the first pilot – the digital rupee in the wholesale (eW) segment – on Tuesday. The retail digital currency pilot is expected to launch this month.

The RBI in a statement said that in the first phase, the electronic wholesale rupee will be used for the settlement of secondary market transactions in government securities. “The use of eW should make the interbank market more efficient. Settlement in central bank money would reduce transaction costs by obviating the need for settlement collateral infrastructure or collateral to mitigate settlement risk,” the RBI said. Based on lessons learned from the first phase of the pilot, future pilots will focus on other wholesale transactions and cross-border payments, he added.

The RBI has been skeptical of private cryptocurrencies (or digital currencies) and called them a big risk to financial stability. He has called for an outright ban on private cryptos in the past. However, the government has not taken a strong stance against these currencies, although it has heavily taxed them (including 30% capital gains tax and 1% tax on each crypto transaction) to check their growing popularity. Nine banks – SBI, BoB, Union Bank of India, HDFC, ICICI, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC – have been identified to participate in the first pilot.

On October 7, the RBI released a concept note to raise awareness about the digital rupee. In the concept note, RBI stated that the RBI-backed digital currency will provide the public with the benefits of virtual currencies while ensuring consumer protection by avoiding the adverse social and economic consequences of private virtual currencies.

In line with the concept note, the electronic wholesale rupee will operate on an account-based model, which would require keeping a record of the balances and transactions of all digital currency holders and indicating ownership of monetary balances.

Sovereign Virtual Currency

While the wholesale electronic rupee will operate on an account-based model, the retail digital rupee will be token-based

  • e-Rupee wholesale pilot will start on November 1, 2022
  • It is designed for restricted access to certain financial institutions
  • The electronic wholesale rupee is intended for the settlement of interbank transfers and related wholesale transactions
  • Nine banks including SBI, BoB, HDFC, ICICI, Kotak Mahindra Bank have been identified to participate in the pilot project
  • The first e-rupee retail pilot will be launched within a month in selected locations in closed user groups comprising customers and merchants
  • RBI has been skeptical of private cryptocurrencies (or private digital currencies) and called them a big risk

NEW DELHI: The Reserve Bank of India’s sovereign digital currency will become a reality as soon as it launches the first pilot – the digital rupee in the wholesale (eW) segment – on Tuesday. The retail digital currency pilot is expected to launch this month. The RBI in a statement said that in the first phase, the electronic wholesale rupee will be used for the settlement of secondary market transactions in government securities. “The use of eW should make the interbank market more efficient. Settlement in central bank money would reduce transaction costs by obviating the need for settlement collateral infrastructure or collateral to mitigate settlement risk,” the RBI said. Based on lessons learned from the first phase of the pilot, future pilots will focus on other wholesale transactions and cross-border payments, he added. The RBI has been skeptical of private cryptocurrencies (or digital currencies) and called them a big risk to financial stability. He has called for an outright ban on private cryptos in the past. However, the government has not taken a strong stance against these currencies, although it has heavily taxed them (including 30% capital gains tax and 1% tax on each crypto transaction) to check their growing popularity. Nine banks – SBI, BoB, Union Bank of India, HDFC, ICICI, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC – have been identified to participate in the first pilot. On October 7, the RBI released a concept note to raise awareness about the digital rupee. In the concept note, RBI stated that the RBI-backed digital currency will provide the public with the benefits of virtual currencies while ensuring consumer protection by avoiding the adverse social and economic consequences of private virtual currencies. In line with the concept note, the electronic wholesale rupee will operate on an account-based model, which would require keeping a record of the balances and transactions of all digital currency holders and indicating ownership of monetary balances. Sovereign Virtual Currency While the wholesale e-rupee will operate on an account-based model, the retail digital rupee will be token-based Wholesale e-rupee pilot from November 1, 2022 It is designed for restricted access to some financial institutions rupee is for the settlement of interbank wire transfers and related wholesale transactions. Nine banks, including SBI, BoB, HDFC, ICICI and Kotak Mahindra Bank, have been identified to participate in the pilot project. select placements in closed user groups including customers and merchants RBI has been skeptical of private cryptocurrencies (or private digital currencies) and called them high risk

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