RBI Launches First Pilot For Digital Rupee, Nine Banks Identified For Participation In The Project

The Reserve Bank of India (RBI) on Monday (31 October) said the first pilot of the Central Bank Digital Currency -- Digital Rupee (Wholesale segment) will be launched on Tuesday (1 November) for transactions in government securities.

The use case for the pilot is settlement of secondary market transactions in government securities, the RBI said in a statement.

RBI said that the 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 cross-border payments will be the focus of future pilots, based on the learnings from this pilot, the central bank said.

Nine banks -- State Bank of India (SBI), Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC -- have been identified for participation in the pilot.

The RBI also said the first pilot of Digital Rupee - Retail segment is planned for launch within a month in select locations in closed user groups comprising customers and merchants.

(With inputs from PTI)