The Reserve Bank of India (RBI) is launched the first pilot for India's Central Bank Digital Currency (CBDC).
The pilot programme for the digital Rupee or e-rupee begined on December 1.
It is the digital form of the Indian rupee that is already in use as paper rupees.
The e-Rupee will be used as a digital token that represents legal tender.
The e-Rupee will be issued in the same denominations as paper currency and coins.
RBI will distribute the digital Rupee or e-Rupee through intermediaries like banks to customers and merchants.
Users will be able to initiate transactions with e-Rupee through a QR code and digital wallet offered by the banks and stored on mobile phones or devices.
For e-Rupee, RBI has partnered with four banks including State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in Mumbai, New Delhi, Bengaluru, and Bhubaneswar.
RBI confirmed that the transaction in digital Rupee can happen between Person to Person (P2P) and Person to Merchant (P2M).
Going forward, different features and applications of the e-Rupee token and architecture will be tested in future pilots, based on the learning from this pilot.