The Reserve Bank of India (RBI) has formally released a new digital token called the digital rupee. Starting today, select banks in particular cities will sell and conduct transactions in the electronic rupee (e-Rupee). If you’re planning to buy the official digital currency of India, the Rupee, there are five things to keep in mind.
1) Cryptocurrency vs Digital Rupee
It is inaccurate to compare the digital Rupee to traditional cryptocurrencies. This also goes by the name Central Bank Digital Currency (CBDC), which indicates that the RBI is supporting the currency in this case. The main characteristic of a cryptocurrency is decentralisation, while the RBI controls and issues the digital rupee and sets all of the CBDC’s requirements.
2) Where to purchase Indian Digital Rupee
The four banks that have been given licences by the RBI as part of the pilot programme to issue digital rupees in India at this time are State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Only Mumbai, New Delhi, Bengaluru, and Bhubaneswar currently have access to the digital rupee. In the next days, more individuals will be able to buy the digital Rupee as a result of its availability being extended to Ahmedabad, Lucknow, Hyderabad, Indore, Gangtok, Guwahati, Kochi, Patna, and Shimla.
3) How to purchase Digital Rupee
Using the official app or website, users will be able to buy the digital rupee from the four listed banks. It is yet unknown with certainty if these banks would allow customers to buy digital rupee using their existing applications or whether they will launch a new app or website that will solely deal in digital rupee.
4) Is it possible to exchange Digital Rupee with loved ones?
This may be shared with friends and family in the same manner as cryptocurrencies can. Once again, only supported applications from Indian banks that have been given permission to distribute them are capable of doing this. The virtual rupee may be maintained in a Paytm wallet, which functions much like real money for a variety of transactions. The RBI has even said that the digital Rupee should be regarded as legal tender by all institutions, both public and private.
5) Physical versus Digital
This may often be used in place exactly like an actual rupee. However, you won’t be able to get your cash back in its original form. However, it is possible to convert digital rupees into cash by using commercial banks.
Who and how can use e-rupee launched on December 1 by RBI?
On December 1, 2022, the Reserve Bank of India (RBI) began the retail pilot programme for the digital rupee. Due to the central bank’s direct control over it, the digital rupee may provide access to secure funds for transactions.
Eight banks have now been chosen to gradually join the digital rupee retail trial in four locations throughout the nation. In the first phase, these banks include ICICI Bank, Yes Bank, State Bank of India, and IDFC First Bank. For the second phase, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will participate.
The same denominations that are now used for paper money and coins will also be used for the e-Rupee. Any member of the closed user group (CUG) is able to conduct transactions in e-rupees using a mobile device-based digital wallet provided by participating banks. Using the QR codes shown at businesses, customers may make payments to retailers.