The Reserve Bank of India has announced that it plans to start its pilot of the country’s CBDC on December 1st. Eight banks will participate, and the pilot will initially be carried out in four cities.

The Reserve Bank of India (RBI) has announced that it plans to launch the first pilot for its retail Central Bank Digital Currency (CBDC), the digital Rupee, on December 1st 2022. The retail phase of the pilot comes after the Central Bank carried out the first segment of testing that started on November 1st for the wholesale use of the digital Rupee.

8 Banks Will Participate, and the Pilot Will Be Carried Out in Four Cities

RBI explained that the retail pilot test of the digital Rupee ‘will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time.’ It will also test the different features and applications of the CBDC with its architecture to be tested in future pilots with lessons learnt from this one.

In addition, eight banks have been identified for participation in the retail CBDC pilot in two batches. The first four that will begin the trial of the CBDC include the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank. The second batch will consist of the Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra.

Furthermore, the testing of the digital Rupee will initially cover four cities: Mumbai, New Delhi, Bengaluru and Bhubaneswar. The Central Bank explained that the digital Rupee would be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

The Digital Rupee to Function Like Regular Physical Cash

Regarding functionality, the RBI explained that the digital Rupee would be no different from how physical cash is used.

The Central Bank stated that it would represent legal tender issued through the intermediary banks mentioned above. It will also be issued in the same denominations as cash, with users able to transact with it through a digital wallet offered by the participating banks and stored on their mobile devices.

（By John P. Njui）