Till last year, private cryptocurrencies were a rage in India, threatening to destroy the hard-earned money of those who may not understand it. But cryptos are a pale shadow now, with not many willing to bet on them due to their hazy legal status, heavy taxation and recent price crashes.
Amid the waning mania, they have a hefty competitor as well: Central Bank Digital Currencies (CBDCs). Globally, central banks, including India’s Reserve Bank of India (RBI), are launching their own CBDCs. While initially they were pitted to take on private cryptos, now the CBDC use cases have expanded as well.
The eNaira of Nigeria and the Bahamian sand dollar are two fully launched CBDCs, while China, Singapore, France, Canada, Saudi Arabia, and the UAE are among the countries conducting CBDC pilots. There are more than 100 CBDCs in research or development stages.
THE RBI’S E-RUPEE
The RBI has launched pilots for its CBDC called e-rupee, which will mimic and expand on usage functions of paper currency.
The wholesale e-rupee pilot was launched in November this year and the RBI is satisfied with its progress.
The retail pilot was launched on 1st December in a closed user group with four participating banks —State Bank of India, ICICI Bank, IDFC First Bank and Yes Bank — and several merchants in New Delhi, Mumbai, Bengaluru, and Bhubaneswar.
Merchants like petrol pumps and retail stores are transacting with select customers that have been provided CBDC wallets.
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