The objective of the digital rupee is not to replace the existing payment system, but rather to supplement it.

The Reserve Bank of India (RBI) is preparing to launch a retail pilot of its central bank digital currency (CBDC), the "digital rupee," within the next month, following testing of its wholesale usage.

The Reserve Bank of India (RBI) is reportedly in the final stages of launching a pilot program for a retail digital rupee. The participants are currently limited to State Bank of India, Bank of Baroda, ICICI Bank, Union Bank of India, HDFC Bank, Kotak Mahindra Bank, Yes Bank and IDFC First Bank, yet is expected that all commercial banks in India will be a part of the program soon.

Banks participating in the trial will test the Central Bank Digital Currency (CBDC) between 10,000 and 50,000 users. The National Payments Corporation of India (NPCI) will manage the infrastructure for the CBCD while the banks collaborate with PayNearby and Bankit platforms to integrate the new payment option. As the anonymous source specified to Indian journalists:

“The e-rupee will be stored in a wallet, the denominations will be available as per the customer’s request, just like you request cash from an ATM. Banks are launching this only in select cities.”

CBDC wallets will have to be downloaded by both customers and merchants, although eventually the RBI intends to integrate it with already-existing digital banking services. It is said that the digital rupee is meant to supplement and not replace the existing payment system.

RBI launched the wholesale segment pilot of the Digital Rupee on November 1. This pilot was meant to settle transactions in government securities on the secondary market, however, there is no update as of yet if the wholesale pilot has been completed successfully.



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