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Here's All You Need To Know About RBI's New Digital Rupee Pilot For Wholesale Segment
Writer: Snehadri Sarkar
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India, 1 Nov 2022 4:59 AM GMT | Updated 1 Nov 2022 5:36 AM GMT
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While he is a massive sports fanatic, his interest also lies in mainstream news and nitpicking trending and less talked about everyday issues.
Retail segment (e₹-R), the very first pilot in Digital Rupee, is planning to roll out within a month in specific locations in closed user groups comprising merchants and customers.
In what is set to be the first pilot in the Digital Rupee, the Wholesale segment (e₹-W) is set to commence on November 1, 2022, the Reserve Bank of India (RBI) announced in an official circular.
"The use case for this pilot is settlement of secondary market transactions in government securities. 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 settlement guarantee infrastructure or for collateral to mitigate settlement risk," the circular was quoted as saying by The Hindu.
A Game Changer!
The release also added in the near future, other wholesale transactions and cross-border payments would also be the big focus of future pilots on the basis of the learnings from this pilot. Banks, namely Bank of Baroda, Union Bank of India and State Bank of India, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, IDFC First Bank, Yes Bank and HSBC, have all been identified as participants in the pilot.
Retail segment (e₹-R), the very first pilot in Digital Rupee, is planning to roll out within a month in specific locations in closed user groups comprising merchants and customers. In due course, details regarding the operationalisation of the e₹-R pilot will be communicated.
RBI Planning For The Future!
The RBI, on October 31, also launched a Concept Note on Central Bank Digital Currency (CBDC) for the country. The main goal behind releasing this Concept Note is to spark awareness regarding CBDCs in general and also the planned features of the Digital Rupee (e₹) mainly.
It further defines the risks, objectives, benefits, and choices of issuing a CBDC in the country. The Note also seeks to explain the Reserve Bank's approach towards the curtain-raiser of the CBDC.
The possibilities of Concept Note also discuss significant considerations such as technology and design choices, issuance mechanisms, possible uses of the Digital Rupee, etc. It further examines the results of the introduction of CBDC on financial stability, the banking system, and monetary policy and analyses privacy problems.
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