RBI launched its first pilot of India’s retail CBDC on December 1st, 2022. The India CBDC pilot is a digital legal tender which can be used by participating customers and merchants. It would be available in the same denominations of currency being used currently, and it would be distributed by banks.
The e-rupee would be available to transact through wallets provided by select banks. The transactions through the digital rupee can be both Person-to-Person(P2P) and Person-to-Merchant (P2M). These transactions can be made through QR codes.
RBI has selected eight banks for this pilot project and the first exercise is being done through four banks. Namely, IDFC Bank, State Bank of India, Yes Bank and ICICI bank. HDFC Bank, Kotak Mahindra Bank, Bank of Baroda, and Union Bank will join this pilot later. The scope of the project is further said to expand to include more banks and locations as needed. The RBI said that the pilot would test the robustness of the creation, distribution and usage of the digital rupee in real time.
CBDCs can propel the economy by making fund transfers and settlements more transparent and real-time. It can also help the reserve bank track the movement of money more efficiently.
However, they are very different from crypto. Cryptos are powered by decentralised blockchains which are operated by a network of independent validators. These blockchains are governed by a set of rules and regulations decided by the network. A CBDC on the other hand is issued by a centralised entity. A CBDC has the primary function of a medium of exchange with a static value, whereas a Crypto is an investment tool.
You can know more about the latest events in the crypto space on ZebPay blogs. Level up your trading experience using ZebPay’s brand-new update.