The Reserve Bank of India’s pilot project on retail digital Rupee is a “game changer”, said SBI Chairman Dinesh Khara, and added that it will have durable effects which would ensure better monetary transmission at much lesser costs.
“The anonymity factor is critical for its acceptance. It collaborates, complements and completes the currency architecture in vogue, while also incubating further innovation,” Khara said in a statement.
The RBI on Thursday announced the launch of a digital rupee retail pilot for a closed user group.
Through the use of the token-based digital rupee, citizens will be able to make or receive payments in currency in completely digital mode through a mobile app, a video clip posted on social media by the Reserve Bank of India said on the day of the launch.
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The pilot will cover a few cities with select banks.
Transactions can be both person-to-person (P2P) and person-to-merchant (P2M). Payments to merchants can be made using quick response (QR) codes displayed at merchant locations, according to the RBI statement released before the launch.
According to the central bank, eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks, namely State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. Four more banks, namely Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently.
RBI said the pilot would initially cover four cities, namely, Mumbai, New Delhi, Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.