New Delhi: The test launch of the Reserve Bank of India’s digital currency (e-rupee retail) which can be used by the people for general transactions will be conducted in 13 cities, including Kochi.
In the first phase, the transactions will take place in Delhi, Mumbai, Bengaluru, and Bhubaneswar on December 1.
Later, the trial process will take place in Kochi, Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Lucknow, Patna, and Shimla.
The Central Bank’s digital currency or e-rupee which can be stored on mobile phones through an app is a substitute for printed notes. Wednesday’s test transactions will be conducted by the State Bank of India, ICICI, Yes Bank, and IDFC Bank.
Later, the Bank of Baroda, Union Bank of India, HDFC, and Kotak Mahindra will also be part of the process.
The test transactions in e-rupee wholesale deals between banks were conducted successfully early this month.
The printed notes won't disappear when digital currency is introduced. As in the case of printed notes, the e-rupee will enable transactions without the need for an intermediary. Just as a person, who does not have a bank account, can buy commodities from a shop using printed currency, any person in a similar situation can carry out transactions using digital tokens.
The e-rupee will be stored in a designated valet on the cell phone. E-rupee has its own intrinsic value and is not just a token of money in the bank. Many people prefer to use currency notes in order to maintain the confidentiality of transactions. If the amount involves small sums, then e-rupee could be used for such transactions. For example, we use printed notes if we want to buy a particular product from a shop and do not want the transaction to reflect in our bank account. As an alternative, the money in the bank could be converted into e-rupee for such transactions.
Though money lying in the bank is being spent, the transaction could be as confidential as done using currency notes.
In short, online transactions of a specific amount could be carried out in the same way as done using paper currency without anyone having to carry notes.
For transactions involving bigger amounts, more conditions may be put in place.
How e-rupee transactions are done
- The Reserve Bank of India will introduce digital tokens equal to the value of the prevailing currency denominations and coins.
- Digital tokens will be disbursed to the public by banks as in the case of printed currency.
- The tokens will be stored in a designated e-rupee valet of the consumer’s phone.
- Individuals and commercial establishments can carry out monetary transactions using the tokens by scanning the QR code in such places.
- As in the case of printed currency, digital currency will not attract interest.