RBI Digital Rupee will be launched today, the need to keep cash will end!
RBI will launch Digital Rupee today i.e. on 1st November. Reserve Bank of India will launch this digital currency as the first pilot project in the wholesale segment. The Reserve Bank may launch the digital form of the retail segment next month. The digital form of the retail segment will be brought to select locations and close group of customers and merchants. In the budget presented this year, Finance Minister Nirmala Sitharaman had mentioned Digital Rupee for the first time. The Finance Minister had said during his budget speech that Digital Rupee would be rolled out in this financial year.
At the same time, earlier this month, RBI had issued a concept note on CBDC (Central Bank Digital Currency) on 7 October, in which it was said that Digital Rupee would be introduced soon. However, this is currently a pilot launch, which will be rolled out for select use cases.
RBI issued a statement today i.e. on October 31, saying that the first pilot (wholesale segment) use case will be brought for settlement of secondary market transactions in the form of government securities. Its use can be effective for the inter-bank market. Digital Rupee can be used in future on this pilot basis for wholesale transactions, cross-border payments etc.
This pilot use case of Reserve Bank of India will create awareness among users about digital currency, so that there is no problem in using such currency in future.
Can convert to cash
According to RBI, CBDC (Digital Rupee) will be a medium of payment, which will be brought as a legal tender for all citizens, business, government and others. Its value will be equal to the legal tender note (current currency) of the safe store. Users will be able to convert it into bank money and cash.
Reserve Bank of India (RBI) Deputy Governor T Rabi Shankar had said that it will eliminate other virtual currencies such as Bitcoin in the digital currency market. The central bank has been opposing cryptocurrencies and virtual currencies such as Bitcoin from the very beginning.
Advantages of CBDC (Digital Rupee)
The Central Bank (RBI) has prescribed two categories of digital currency – CBDC-W and CBDC-R. CBDC-W will be used as wholesale currency, while CBDC-R will be used as retail currency. It can be used by all private, non-financial consumers and businesses. RBI says that India’s digital economy will get a boost due to digital currency. Due to this, the cost of physical cash management can be reduced. Also, digital economy can be developed.
