Reserve Bank of India to launch digital rupee pilot in November

Now launching a wholesale CBDC, the RBI plans to launch the digital rupee for the retail segment within a month in select locations.

The Reserve Bank of India (RBI) is on track to launch a central bank digital currency (CBDC) after announcing its digital rupee project in February.

India's central bank will launch the digital rupee pilot for the wholesale segment on November 1, the RBI announced on October 31.

The pilot project will involve nine locally operating banks, including India's largest bank, the State Bank of India. According to a Reuters report, other banks participating in the pilot will also include Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

The primary use case for the Indian CBDC pilot will be to settle secondary market transactions in government securities. The digital rupee is expected to add more efficiency to the interbank market by reducing settlement transaction costs, the RBI said.

Wholesale CBDCs are a type of CBDC primarily used by financial institutions such as banks, involving interbank transactions such as securities settlement and cross-currency payments.

Unlike wholesale CBDCs, retail CBDCs are used by households and businesses, allowing them to make payments directly and store value through the digital version of a specific fiat currency, such as the rupee Indian. According to the new report, the RBI plans to launch the digital rupee for the retail segment within a month in selected locations.

India was quite quick to launch a CBDC. Indian Finance Minister Nirmala...