HomeTop Stories16,000 users have made payments worth ₹64,000 in 160,000 transactions after launching...

16,000 users have made payments worth ₹64,000 in 160,000 transactions after launching digital rupee pilot

The government may have to draft a law to allow retail users who make low-value payments in the recently launched digital rupee to erase the transaction trace, as the central bank digital currency (CBDC) is equivalent to cash, which must provide the same degree of anonymity. bearer, person with direct knowledge of said thing.

Since the launch of the digital rupee pilot, about 16,000 users have made payments worth ₹64,000 in 160,000 transactions so far.

“Digital footprints are unavoidable in the case of CBDC transactions. But like physical notes, a certain degree of anonymity is required – up to a certain limit – which will require both legal and technical interventions at the appropriate time,” said the person quoted above, requesting anonymity.

A second person linked to matters related to currency management said the Reserve Bank of India (RBI) has already launched a pilot project and based on experience, changes will be made to the digital currency system for retail use. RBI’s pilot project in the retail segment – ​​Digital Retail in Rupees (e ₹-R) – was launched on December 1, 2022 under a closed user group.

“Even today when you use physical currencies, you have to declare your PAN for high value payments above ₹50,000. So legally, anonymity is only needed for low-value payments,” he said.

A proper evaluation of the CBDC system could be done when the user volume reaches a critical mass. “We expect the total number of customers [retail users] to reach 50,000 by the end of this month and 15-25 million within four to five months. Then a proper analysis could be carried out,” said the former, adding that the central bank is taking a cautious approach to the matter.

Because of the high-value transactions, “complete anonymity” may not be an issue for the wholesale segment, the second person said. The RBI has launched a CBDC pilot project in the wholesale segment – Digital Rupee – Wholesale (e ₹-W) – on November 1, 2022, with use limited to settlement of transactions in the secondary market of government securities, Finance Minister Pankaj Chaudhary told the Lok Sabha on 12. december

“The use of (e ₹-W) is expected to make the interbank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for infrastructure for settlement guarantees or collateral to mitigate settlement risk,” he said.

Four banks are currently participating in the retail CBDC pilot, but eventually all banks will join, the first person said. RBI has so far identified eight banks for phased participation in the retail pilot project. The four banks participating in the first phase are State Bank of India (SBI), ICICI Bank, Yes Bank and IDFC First Bank. Next in line are Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank, according to the second person.

According to the minister, e₹-R is in the form of a digital token that represents legal tender. It is issued in the same denominations as paper currency and coins. Distribution takes place through financial intermediaries, i.e. banks. “Users will be able to transact with e₹-R through a digital wallet offered by participating banks. Transactions can be both person-to-person (P2P) and person-to-merchant (P2M),” he said. e ₹-R offers features of physical cash such as trust, security and settlement finality. Like cash, CBDC will not earn any interest and can be converted to other forms of money such as bank deposits, he added.

The first person mentioned above said the government is in talks with three countries on cross-border payments in the RBI’s central bank digital currency (CBDC). “This can happen either through India’s official platform or through their own systems through a secure application programming interface (API),” he said, declining to name the countries due to confidentiality agreements.

He said the system can also help internationalize the rupee as half a dozen countries have already agreed to trade with India in the Indian currency. “About 30 banks have opened vostro accounts. Too much business dependence on one currency is not prudent. Even private businesses would like to spread their risks,” he said.

Read Now :<strong>Cold wave warning for Punjab, Haryana, Uttar Pradesh, Rajasthan and Himachal Pradesh: IMD</strong>

[responsivevoice_button buttontext="Listen This Post" voice="Hindi Female"]


Please enter your comment!
Please enter your name here


Trending News

Debate over whether Indian cricket team will go to Pakistan for the Asia Cup is only getting heated

With each passing day, the debates about whether the Indian cricket team will travel to Pakistan for the Asia...

Emraan Hashmi turns 44 on Friday, he called Aishwarya Rai artificial during his debut on Koffee with Karan in 2014

When Emraan Hashmi made his debut on filmmaker Karan Johar's chat show Koffee with Karan in 2014, he made...

No evidence of severity of new Covid variant

XBB.1.16 has become the predominant variant of Sars-CoV-2 in India, according to a genome sequence analysis published by Indian...

Hubble observes the changing weather and seasons on Jupiter and Uranus

Since its launch in 1990, NASA's Hubble Space Telescope has been an interplanetary weather observer that keeps an eye...