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RBI is going to launch its digital currency pilot project on December 1!

RBI Digital Currency: RBI is going to rollout the pilot project of its digital currency (CBDC) on December 1. In this pilot project, a closed user group consisting of customers and merchants will also be started at selected locations. E-Rupee (e₹-R) will work as a digital token. Digital currency will work in the same way as currency notes and coins work. And it will be available in the same value as currency of different denominations. And it will be distributed through banks.

Pilot project at selected locations
This pilot project will be covered in a closed user group at select locations which will include participating customers as well as merchants. Digital Rupee (e₹-R) will be in the form of digital token which will be legal tender. It will be distributed among the banks. RBI said that users will be able to transact through digital rupees from digital wallets of banks stored in mobile phones or devices. These transactions can be done Person to Person (P2P) i.e. between two persons and Person to Merchant (P2M) i.e. between a person and a merchant. Payment to a merchant i.e. a shopkeeper can be made through the QR codes being displayed at the location of the merchant. This pilot project will be covered in a closed user group at select locations which will include participating customers as well as merchants. Similar to physical currency in digital form, it will be equipped with features like trust, safety and settlement facility.

Interest will not be available on digital currency!
RBI has said that no interest will be given on digital currency like cash. Also, it can be converted into another type of currency ie deposits with banks. Through this pilot project, it will help to test the concept of digital currency, distribution and test its use in real time. Based on the experiences of this pilot project, different features and applications of digital currency will be tested in future pilot projects.

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First launch happening here
According to RBI, 8 banks have been identified for the pilot project. In the first phase, four banks including State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank are participating in the pilot project in four cities of the country. After this Bank of Baroda, Union Bank, HDFC Bank and Kotak Mahindra Bank will join later. This pilot project is going to be launched first in Delhi, Mumbai, Bangalore and Bhubaneswar. Later it will be launched in Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. Later, if needed, the pilot project can be expanded to more banks, users, and locations.

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