RBI to soon launch Digital Rupee on pilot basis for limited use

“It explains the objectives, choices, benefits, and risks of issuing a CBDC in India. The note also seeks to explain Reserve Bank’s approach towards introduction of the CBDC,” the central bank said in a statement.

The concept note also discusses key considerations such as technology and design choices, possible uses of Digital Rupee, issuance mechanisms, etc. It examines the implications of the introduction of CBDC on the banking system, monetary policy, financial stability, and analyses privacy issues.

“As the extent and scope of such pilot launches expand, RBI will continue to communicate about the specific features and benefits of e₹, from time to time,” the statement said.

Finance Minister Nirmala Sitharaman in her 2022-23 budget speech earlier this year had announced the launch of the Digital Rupee – a digital currency backed by the central bank. The announcement expressed government’s intention on cryptocurrencies and other virtual currencies.

In the past, the RBI had on several occasions flagged concerns of money laundering, terror financing, tax evasion, etc with private cryptocurrencies like Bitcoin, Ether, etc and had planned to announce its own CBDC.