RBI to commence first Digital Rupee pilot in the wholesale segment on November 1, 2022
The Reserve Bank of India (RBI) has announced that the first pilot in the Digital Rupee — Wholesale segment (eRs.-W) shall commence on November 1, 2022 and the use case for this pilot is the settlement of secondary market transactions in government securities. Use of eRs.-W is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by preempting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. Going forward, other wholesale transactions and cross-border payments will be the focus of future pilots, based on the learnings from this pilot.
Nine banks — State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC — have been identified for participation in the pilot.
According to a concept note previously shared by the RBI, Digital Rupee will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money.
