What would be the fate of India's digital currency: E-rupee?
Nandini Agrawal
Guinness Book of World Records | Ex-BCG | LinkedIn Top Voice | Dr. | India Book of Records | CA - AIR 1 | TEDx | Josh Talks | ACCA (AIR 1, AWR 7&9)
The Reserve Bank announces the launch of the first pilot for retail digital Rupee?(e?-R)?on December 01, 2022, in pilot mode.
The pilot would cover select locations in closed user groups (CUG) comprising participating customers and merchants. The?e?-R?would be in the form of a digital token that represents legal tender.
India is one of the very few countries which have taken the lead. The e-rupee replaces cash and coins and is available in the same denominations. It resides on your mobile phone, and you make payments using a smartphone and scan a QR code.
Well, technically your entire cash balance does not wholly reside on the phone, but in your account, which is held in the RBI. The e-rupee will not earn any interest, just like cash in your pocket does not.?You can also carry small amounts in your phone which works like a digital wallet. So even if you are offline the money can be used from one phone to the QR code recipient.?
Who all are partners in this pilot? How scope of pilot is expected to scale up?
Eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks, viz., State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country.
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Four more banks, viz., Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently. The pilot would initially cover four cities, viz., Mumbai, New Delhi, Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The scope of pilot may be expanded gradually to include more banks, users and locations as needed.
What does the e-rupee achieve??
It can get rid of all paper cash and metal coins. That saves trees. It eliminates the hassles of going to an ATM to withdraw cash. It can be used even by those who do not have a bank account, and who just store cash in their cupboards or under their mattress. That can be transformed into e-rupees. It is more secure and efficient.?
Although similar to crypto technology, the anonymity of the transactions is not maintained as RBI has complete visibility over the details of the transaction.
But is not all this achieved by the Unified Payment Interface (UPI) based payments? That is using apps like GPay, PhonePe, or PayTM?
The big question now is - On what factors will e-rupee compete with UPI?
MT/SME at Genpact
1 年Nice insight in a detailed way Nandini Agrawal thanks to share!!
B-Tech CSE UnderGrad || Blockchain and Cryptography Enthusiast
1 年Nandini, can you please tell what is the reason for the introduction of the e-rupee when UPI running perfectly, as Govt. just want to replace Cash and coin, and go digitally, UPI just transfer an amount of money from one bank account to another bank and this method is quite successful, so can you please tell what additional e-rupee has to offer to the citizen. And by the way, this article is quite resourceful thanks for sharing.
CMA
1 年Banks will have to increase the interest rate on savings bank account or provide some other incentive otherwise people will keep less money in savings bank account and more money as e rupee . There will be no need for keeping their money in savings bank account. This will impact banking business as they will have less money to lend.
intermediate Student at Institute of Chartered Accountants of India BCOM REGULAR
1 年Till 2030 indian rupee will be in place of dollar