Reserve Bank of India released a concept note on Friday regarding its digital currency, and stated that the pilot launch of the digital Rupee or e-Rupee will begin soon across the country.
The central bank has highlighted that the launch of e-Rupee will begin for specific use cases.
RBI said in a concept note on Central Bank Digital Currency (CBDC) that with the expansion of the extent and scope of such pilot launches, the central bank will continue to communicate the specific features and benefits of digital rupee every now and then, or from time to time.
Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank. While most central banks across the globe are exploring the issuance of CBDC, the key motivations for its issuance are specific to each country’s unique requirements.
This Concept Note explains the objectives, choices, benefits and risks of issuing a CBDC in India, stated the FinTech Department of RBI.
The central bank further said that the purpose of issuing the concept note is to create awareness about the central bank digital currency and the digital rupee’s planned features.
“The concept note also discusses key considerations such as technology and design choices, possible uses of the digital rupee, and issuance mechanisms, among others”, the bank said.
It added that the note also examines the implications of the introduction of CBDC on the banking system, monetary policy, and financial stability, and analyses privacy issues, stated a PTI report.
One of the key features of RBI’s digital currency will be that it can freely be converted to commercial bank money and cash, and will be a fungible legal tender, which would not require the currency holders to have a physical bank account.