India cenbank to start pilot of digital rupee on Nov 1

The Reserve Bank of India (RBI) will launch the pilot for a central-bank-backed digital rupee for the wholesale segment on Nov. 1, it said on Monday, identifying nine banks, including top lender State Bank of India, to participate in the project.

The pilot’s use case will be to settle secondary market transactions in government securities, with the e-rupee expected to make the interbank market more efficient, the RBI said in a statement.

Settlements in central bank digital currency would reduce transaction costs, the RBI added.

Besides SBI, the pilot will include Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank (NASDAQ:FRBA) and HSBC, the RBI said.

The launch of the e-rupee for the retail segment is planned within a month in select locations, the RBI added.

The RBI has been exploring the pros and cons of a central bank digital currency for some time and is working towards a strategy to implement it in a phased manner, it said earlier this month.

The central bank’s plans for a currency in digital form comes amid its staunch opposition of cryptocurrencies.