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Sunday, February 5, 2023

RBI’s E-Rupee Rollout 

A key benefit of blockchain-based cryptocurrencies is the solution they provide for transferring money in real-time. Global remittance transfers cost anywhere between 5% and 25% while transfers through blockchain-powered tokens can cost virtually nothing. Some blockchain companies such as Ripple Labs have created a worldwide network of financial institutions to bring instant and cheap remittance services to the people

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The Reserve Bank of India (RBI) launched the Central Bank Digital Currency (CBDC), nicknamed e-rupee or digital rupee, for the retail segment on December 1. It released Rs. 1.71 crore in e-rupee format to four participating banks to roll out its use. As of now four banks and four cities have been selected for the rollout of e-rupee. Right now, it is a pilot project which will have multiple stages as per RBI’s plan to introduce the CBDC in a graded manner so that it doesn’t disrupt the existing payments and settlement systems. The idea of the pilot is to educate people about digital currency and the way it can be used. In the next phase of the pilot, more banks and cities will be included. During the pilot phase, the e-rupee will be released within a closed group for payments between person-to-person (P2P) and person-to-merchant (P2M). Users will need to download a wallet offered by the banks on their mobile phones where they can store the e-rupee. To make payments to merchants, a unique QR code at the merchant touch-point will be used. Users can scan the code through their mobile phones and make the payment.

The four banks that have been selected for the rollout of e-rupee for the retail sector are State Bank of India, ICICI Bank, IDFC Bank, and Yes Bank, and cities, where e-rupee will be available, are New Delhi, Mumbai, Bengaluru and Bhubaneswar. In the next 2-3 weeks, HDFC Bank, Bank of Baroda, Kotak Mahindra Bank and Union Bank of India will be included in the list of banks that can offer e-rupee services. The cities where e-rupee will be available in the next phase include Ahmedabad, Guwahati, Hyderabad, Gangtok, Indore, Kochi, Patna, Shimla and Lucknow. While the RBI has released Rs 1.71 crore for this purpose, it said it will supply more e-rupee depending on consumer demand and the bank’s liquidity situation. Merchants can be from street vendors to shops. Payments to food delivery apps and similar merchants will be included in the next phase of the pilot. Initially, the RBI is aiming at 50,000 merchants and customers. According to Cecilia Skingsley, former Swedish central banker and current chief of the International Bank of Settlements’ Innovation Hub, which is working with several Governments on their CBDC projects, digital currency is a natural evolution of money. With the growth of online shopping, digital money is fast removing the need for cash.

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A key benefit of blockchain-based cryptocurrencies is the solution they provide for transferring money in real-time. Global remittance transfers cost anywhere between 5% and 25% while transfers through blockchain-powered tokens can cost virtually nothing. Some blockchain companies such as Ripple Labs have created a worldwide network of financial institutions to bring instant and cheap remittance services to the people. They also offer quick and cost-effective payment settlements to remittance service operators and financial institutions. The banking industry can’t ignore these developments for long without losing customers to the burgeoning cryptocurrency sector. Given this, e-rupee for the retail segment is likely going to become a big hit. It can give competition to Paytm, GPay and similar other entities. It can go on to become a success as big as the UPI. But this is all thanks to the big Indian market and the lead that India has taken in digital transformation.

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The Hills Timeshttps://www.thehillstimes.in/
The Hills Times, a largely circulated English daily published from Diphu and printed in Guwahati, having vast readership in hills districts of Assam, and neighbouring Nagaland, Meghalaya, Arunachal Pradesh and Manipur.
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