Tag: Money & Banking

Money & Banking Reserve Bank of India (RBI) launched Retail Digital Rupee RBI released the central bank digital currency (CBDC)- digital rupee or e-rupee - for retail customers and merchants. Earlier, RBI launched digital rupee in the wholesale segment to settle secondary market transactions in government securities. Initially, four banks will be involved in controlled launch of digital currency namely, SBI, ICICI Bank, Yes Bank, and IDFC First Bank in Mumbai, New Delhi, Bengaluru and Bhubaneswar. These banks will issue digital tokens in the same denominations as paper currency, which can be used to make and receive payments. This is an Indirect model of CBDC. About Retail e-rupee Retail e-rupee will be an electronic version of cash and primarily meant for retail transactions. It will be potentially available for use by all i.e., private sector, non-financial consumers and businesses. It will provide access to safe money for payment and settlement, as it will be a direct liability of the central bank. CBDC or Digital rupee is a legal tender issued by RBI in digital form. It is the same as fiat currency and exchangeable one-to-one with fiat currency. Model for Issuance and Management of CBDC Direct model (Single Tier model) where the central bank is responsible for managing all aspects of the CBDC system viz. issuance, account-keeping and transaction verification. Indirect model (Two-Tier model) where central bank and other intermediaries (banks and any other service providers), each play their respective role.