Guwahati: The first pilot for the retail digital Rupee or e-rupee is scheduled for launch on December 1, the Reserve Bank of India announced on Tuesday.

The retail digital Rupee or e-rupee or e?-R will be launched by the RBI in collaboration with four banks including State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank in Mumbai, New Delhi, Bengaluru, and Bhubaneswar in the pilot event. 

RBI said that the pilot launched will cover only the closed user group (CUG) that will comprise participating customers and merchants.

The e-rupee (e?-R) would be in the form of a digital token that represents legal tender. 

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It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks. Users will be able to transact with e-rupee through a digital wallet offered by the participating banks and stored on mobile phones/devices. 

Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. 

The e?-R would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks.

The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time. Different features and applications of the e?-R token and architecture will be tested in future pilots, based on the learnings from this pilot.

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Eight banks have been identified for phase-wise participation in this pilot. “The first phase will begin with four banks, viz., State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country. Four more banks, viz., Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot subsequently”, a statement by the RBI read.

The pilot would initially cover four cities- Mumbai, New Delhi, Bengaluru and Bhubaneswar and later extend to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. 

The scope of the pilot may be expanded gradually to include more banks, users and locations as needed.

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