Digital currency launched in India: In the budget, it was declared. On Tuesday, the Reserve Bank will introduce the e-rupee, a digital currency. Its initial pilot project will only be available to the wholesale industry. In other words, it allows transactions across various banks. OK, so for the time being they will only buy and sell government bonds. And within a month, RBI intends to introduce e-rupee for wider usage on a pilot basis.
Multiple examples of consumers losing money or being scammed as a result of bitcoin transactions have reported over the past several years. Investigations are being conducted by entities like ED.
The Reserve Bank and the Center have issued various advisories. Digital currencies, E-Rupee controlled by major banks are already being developed in about 60 different nations, taking into consideration the hazards associated with typical crypto transactions.
The trend of digital currency will reduce the cost of transactions
The central bank says that with the digitization of the rupee, transactions will become economical than before. Based on the learnings from this pilot project, future pilot projects will be prepared and their focus will be on bulk and cross border transactions.
RBI will start its own digital rupee
Digital currency launched in India for wholesale and retail sectors
Look in a moment about Digital Currency: Key Points
Reserve Bank launched ‘e-rupee’ digital currency powered by blockchain technology.
• This currency has two parts – general (retail) and for financial institutions (wholesale).
• There will be a trial of e-rupee on Tuesday for some bulk transactions. For example, bank investments in government bonds.
The first phase would include participation from State Bank, Bank of Baroda, Union Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC.
• Within a month, many cities will start testing out the currency’s use in regular transactions between people and businesses.
• The RBI intends to combine the advantages of digital currency while taking into account the features of conventional currency.
• In this case, Nirmala Sitharaman, the finance minister, had stated in the previous budget that only the Reserve Bank would launch Digital Rupee/digital currency for internet use. The technology behind it will be blockchain-based. According to the Center, transactions involving this digital currency will be less risky thanks to government regulation. This will hasten the development of a global digital transaction system.
Similar to this, the RBI announced on Monday that starting on November 1 certain wholesale transactions will use the e-rupee in an experimental way. Participating financial institutions in the first phase include State Bank, Bank of Baroda, Union Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC.
The apex bank wants to add the benefits of digital currency while keeping the features of normal currency. And in the following phase, experimental transactions using the general-purpose money will start between chosen people and chosen businesses in chosen cities across the nation within a month.
What is CBDC?
A CBDC is a digital or virtual currency, but it cannot be compared to virtual currencies or cryptocurrencies, which have grown over the past decade. Private virtual currencies do not provide any information about an individual’s debts or liabilities, as there is no fixed person issuing them.