RBI begins pilot of Digital Rupee

The Reserve Bank of India (RBI), has officially announced the launch of the pilot for a digital rupee for the wholesale segment on November 1, 2022. It has also identified nine banks, including the country’s biggest public bank, the State Bank of India, to work on the central bank-backed digital rupee.

India’s central bank and regulatory body published the official announcement on its website, which stated “RBI vide Press Release dated October 7, 2022 had announced that the Reserve Bank will soon commence pilot launches of Digital Rupee (e ) for specific use cases. Accordingly, the first pilot in the Digital Rupee – Wholesale segment (e -W) shall commence on November 1, 2022.”

The official statement further added, “The use case for this pilot is settlement of secondary market transactions in government securities. Use of e -W is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. Going forward, other wholesale transactions, and crossborder payments will be the focus of future pilots, based on the learnings from this pilot.”