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India plans to introduce e-rupee digital currency. PHOTO/IST
“At this time, we are at the forefront of the evolution of a currency that will change the nature of money and its function,” the RBI said in a statement.
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The digital rupee is similar to paper currency, but has a different shape.
It can be exchanged for the equivalent of an existing currency and will be accepted as a currency of exchange, legal tender and safe deposit box, the RBI said.
“The concept of digital currency requires discussion in terms of technology selection and design, potential use, production mechanisms, etc.,” the central bank added.
The RBI expects the digital rupee to reduce the costs of issuing money and transactions as global currency regulators seek to popularize a more acceptable form of electronic money amid a reduction in the use of paper money.
Among the features of the currency are retail CBDCs, intended for the settlement of interbank transfers and related wholesale transactions, potentially used by the private sector, non-financial users and businesses.
Additionally, wholesale CBDCs represent a version of electronic money and are primarily intended for retail transactions and are designed to restrict access to certain financial institutions.
The digital rupee issued by RBI will grow India’s digital economy, increase financial inclusion and make the financial and payment system more efficient.
(wbs)
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