The Reserve Bank announces the commencement of the first retail pilot project for digital rupees (e₹-R), also known as central bank digital currency (CBDC).
The pilot will initially cover the four cities of Mumbai, New Delhi, Bengaluru, and Bhubaneswar, where customers and merchants will be able to use the digital rupee (e₹-R), or e-rupee.
e-Rupee is the digital form of currency notes. The central bank (in this case, the RBI) releases CBDC as a sovereign or fully independent currency in accordance with the country's monetary policy.
Once it has been formally issued, CBDC will be regarded by all three parties—citizens, governmental entities, and businesses—as a form of payment and legal tender.
The RBI introduced the digital rupee for the wholesale market on November 1st, 2022, to settle secondary market transactions in government securities.
In July 2022, 105 countries were exploring CBDC. Ten countries have introduced CBDC, with Jamaica's JAM-DEX being the most recent. The first was the Bahamian Sand Dollar in 2020.
– Reduction in operational costs – Fostering financial inclusion – Innovation in the payments system