Reserve Bank of India begins wholesale Digital Rupee e-W pilot retail coin to follow soon

Indian central bank, the Reserve Bank of India, is all set to pilot its first central bank digital currency (CBDC) for the wholesale segment. Earlier, the bank talked about how it could release two types of CBDC, one for the retail sector and the other for the wholesale industry. Now, it is beginning with a total of nine banks on board. The pilot will decide the future of the Digital Rupee in India. The Digital Rupee for the retail sector is said to debut soon.

As per the official press release, the first pilot of the Digital Rupee - Wholesale segment (e₹-W) is commencing on November 1, 2022. "The use case for this pilot is settlement of secondary market transactions in government securities." Adding to it, the release mentions, "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."

Here are the banks that are participating in the e₹-W pilot

1. State Bank of India
2. Bank of Baroda
3. Union Bank of India
4. HDFC Bank
5. ICICI Bank
6. Kotak Mahindra Bank
7. Yes Bank
8. IDFC First Bank
9. HSBC

The e₹-W pilot is expected to make the interbank market more efficient by enabling faster and more secure transactions. What's even more interesting is that the Reserve Bank of India is planning to release the first pilot in Digital Rupee - Retail segment (e₹-R) within a month. However, the pilot will be conducted in select locations amid closed user groups comprising customers and merchants. 

Banks around the world are exploring ways to implement digital currency

More details regarding how the pilot will function will be shared soon. Earlier this month, the central bank released a 50-page concept note that discussed the opportunities, use cases and functionality of the Digital Rupee. The Indian central bank is not alone in exploring CBDCs. 

Most recently, Australia's Central Bank rolled out a CBDC research project, with plans to announce the pilot next year. The Bank of International Settlements also conducted projects with central banks of the United Arab Emirates, Thailand and Hong Kong to gather information about CBDCs and their implementation in cross-border transactions. The pilot project lasted six weeks and saw 160 transactions amounting to $22 million.

About Me: Writing for more than four years, Shikhar is not just a tech journalist but a tech enthusiast who watches smartphone launch events like his favourite Marvel movies. He stays in sync with all the new toys released by giants and specialises in consumer tech Read More