Pilot e-Rupee to Be Launched in India
Journalists wait next to the logo of the Reserve Bank of India (RBI), outside its head office in Mumbai, India, Tuesday, April 20, 2010
The Reserve Bank of India (RBI) stated that a central bank-backed digital currency is a sovereign currency issued in accordance with monetary policy. It will appear as a liability on the central bank’s balance sheet.India’s Reserve Bank released a digital currency concept paper on Friday in which it claimed that it plans to launch a pilot e-rupee for specific use cases soon.
"The purpose behind the issue of this Concept Note is to create awareness about CBDCs [Central Bank Digital Currencies] in general and the planned features of the Digital Rupee (e₹), in particular. It explains the objectives, choices, benefits, and risks of issuing a CBDC in India. The Note also seeks to explain [the] Reserve Bank’s approach towards [the] introduction of the CBDC," the central bank said in a release.
The RBI broadly defined CBDCs as legal tender issued by a central bank in digital form. They are similar to sovereign fiat currencies but have a different form, can be exchanged on a par with existing currency, and must be accepted as legal tender and as a safe store of value. CBDCs will show up as liabilities on the central bank’s balance sheet.The concept note also stated that digital currency must be accepted as a means of payment by all citizens, businesses, and government agencies. It also discussed key considerations such as the choice of technology and design, the possible use of the digital rupee, and issuance mechanisms, among others.In the past, the RBI has noted its concerns about money laundering, terrorist financing, or tax evasion with private cryptocurrencies such as Bitcoin or Ether, and planned to announce its own CBDC.The e-rupee is an electronic voucher that will be delivered to beneficiaries in the form of a QR code and a voucher based on an SMS string, with which funds will be directly transferred to their bank account. Any government agency and corporation can generate e-rupee vouchers through their partner banks.
