The Reserve Bank of India (RBI) has said that the first retail central bank digital currency pilot project is due to start on December 1st.
The digital rupee will function as a token that completely replaces monetary units in the national currency. The pilot project will affect a limited group of users, including financial institutions, their customers and some merchants.
According to the RBI, transactions using the digital rupee will go through a wallet provided to clients by financial institutions selected to participate in the project.
The first phase of testing will affect four commercial banks: State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank. Four cities will be involved: Mumbai, New Delhi, Bangalore and Bhubaneswar.
“During the pilot project, it is planned to test transactions between individuals (P2P), as well as from the client to the seller (P2M). Payments to sellers of goods and services will be made using QR codes posted at the cash desks of retail outlets. Digital tokens will be distributed among project participants in the same denomination as the current currency of India. Tokens will be issued through participating financial intermediaries,” the central bank said in an announcement.
Earlier, during the announcement of the upcoming pilot project, RBI said that the first stage of testing the digital rupee will affect an audience of up to 200,000 users. To integrate the new payment method, banks will use the services of the Bankit and PayNearby platforms, and the infrastructure itself will be owned by the National Payments Corporation of India (NPCI).
Source: Bits
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