What is RBI's e-Rupee? 10 things you need to know about it

RBI e-Rupee : While most countries are currently exploring the idea of central bank owned digital currency for their nation, India is also working towards introducing what is known as 'digital rupee'.

The Reserve Bank of India (RBI) said this in a concept note on central bank digital currency (CBDC) aimed to create awareness about such currencies in general and the planned features of the Digital Rupee, in particular, according to a release. India's CBDC will be called 'e-rupee'.

EJbiz points key highlights of the RBI's concept note on digital currency:

1. E-rupee or digital rupee is a digital version of the Indian rupee that the RBI is exploring. The RBI has proposed to issue two versions - wholesale for interbank settlement and retail for the public. According to the indirect model proposed by the RBI, you will hold the digital rupee in a wallet with a bank or service provider.

2. The digital currency must be accepted as a medium of payment, legal tender and a safe store of value by all citizens, enterprises and government agencies.

3. A large-scale pilot will be conducted, with users from different income levels, literacy levels, regions, genders and age groups. The Digital Rupee will be designed in a manner that's least disruptive to existing financial system.

4. While the digital rupee is identical to banknotes, it will be tailored for speedier and less expensive settlements.

5. Noting that out of 143.3 crore population, only 82.5 crore people have internet access, for financial inclusion it is necessary that the digital payment support offline capability.

6. The wallets must be capable of independently verifying the validity of any CBDC transaction without interacting with the server during the transactions.

7. Unlike cryptocurrencies, which are private in nature, RBI’s Central Bank Digital Currency (CBDC) will be issued and controlled by the central bank itself.

8. As India already has a robust digital payment infrastructure like UPI, digital wallets like Paytm, Gpay, etc. the upcoming digital payment system must be compatible and interoperable with them.

9. The goal of the digital rupee is to mimic the characteristics of money. But unlike bank deposits, it wouldn’t pay interest.

10. Citing concerns of security, the RBI concept note states that central bank digital currency ecosystems may be at a similar risk of cyber-attacks that the current payment systems are exposed to. "The cybersecurity considerations need to be taken care of both for the item and the environment.

What is digital rupee that RBI will introduce? All you need to know