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Tuesday, Dec 06, 2022

RBI to soon launch Digital Rupee on pilot basis for limited use

The RBI said that the purpose behind issuing the concept note is to create awareness about CBDCs in general and the planned features of the Digital Rupee.

A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi. (Reuters/File photo)

The Reserve Bank of India (RBI) on Friday said that it will soon commence the pilot launch of the Digital Rupee for specific use cases as it tests digital currency in India. It released a concept note on the Central Bank Digital Currency (CBDC).

The RBI said that the purpose behind issuing the concept note is to create awareness about CBDCs in general and the planned features of the Digital Rupee.

“It explains the objectives, choices, benefits, and risks of issuing a CBDC in India. The note also seeks to explain Reserve Bank’s approach towards introduction of the CBDC,” the central bank said in a statement.

The concept note also discusses key considerations such as technology and design choices, possible uses of Digital Rupee, issuance mechanisms, etc. It examines the implications of the introduction of CBDC on the banking system, monetary policy, financial stability, and analyses privacy issues.

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“As the extent and scope of such pilot launches expand, RBI will continue to communicate about the specific features and benefits of e₹, from time to time,” the statement said.

Finance Minister Nirmala Sitharaman in her 2022-23 budget speech earlier this year had announced the launch of the Digital Rupee – a digital currency backed by the central bank. The announcement expressed government’s intention on cryptocurrencies and other virtual currencies.

In the past, the RBI had on several occasions flagged concerns of money laundering, terror financing, tax evasion, etc with private cryptocurrencies like Bitcoin, Ether, etc and had planned to announce its own CBDC.

First published on: 07-10-2022 at 04:21:04 pm
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