The Reserve Bank of India (RBI), has selected nine institutions to take part in the testing of the nation’s first digital rupee (e₹-W), starting from November 1.
The central bank announced on Monday that State Bank of India, Union Bank of India, Bank of Baroda, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Yes Bank, HSBC, and IDFC First Bank, will test the digital money or central bank digital currency (CBDC) in India.
According to the central bank of the nation, this pilot program will enable the grounds for secondary market transactions involving government securities.
RBI aims to boost productivity interbank market via CBDC
RBI further states that the adoption of e₹-W is anticipated to boost the productivity of the interbank market because settlement in central bank money would lower transaction costs as it eliminates the requirement for infrastructure and provides settlement which guarantees collateral to decrease settlement risk.
Within a month, the first pilot for digital rupee in the retail sector (e₹-R) is scheduled to begin in a few select areas with limited user groups that will include the customers and merchants. Notably, future pilot projects will concentrate on cross-border payments and other wholesale transactions.
In February, India’s Finance Minister Nirmala Sitharaman assured that the new crypto regulations presented in the budget session proposal have the support of both the government and the RBI. She also urged the RBI to issue a digital rupee based on blockchain as it had been months after the central bank sought amendments to the Reserve Bank of India Act, 1934, to include digital currencies in the definition of “banknotes,”
In December last year, RBI governor, Shaktikanta Das, shared his concerns about cyber security and illegal digital actions to Business Today followed by the ban on crypto assets in India as reported by TheCoinRise. However, in summer this year, the RBI asserts to follow a “graded approach” in order to launch the Indian CBDC or Digital Rupee.
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