RBI launches first pilot of wholesale CBDC

The first pilot of the Digital Rupee (e₹) in the wholesale segment will commence from Tuesday - November 1, the Reserve Bank of India has said. The digital rupee (wholesale) will be first user to settle transactions in government securities. The regulator also added that the pilot project for the retail version of the digital rupee will be launched in a month.

Nine banks including State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC have been identified for participation in the pilot.

“The use case for this pilot is settlement of secondary market transactions in government securities,” the RBI said. “Use of e₹-W is expected to make the inter-bank market more efficient.”


The RBI on October 7, had said that it will soon start a pilot project to test the digital rupee in specific use cases. It had also added that the virtual money’s wider remit must await a thorough central bank analysis of its scope and costs.

As part of its announcement the regulator also said that settlement in central bank money would reduce transaction costs by pre- empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.

“Going forward, other wholesale transactions, and cross-border payments will be the focus of future pilots, based on the learnings from this pilot,” it said.

The first pilot in Digital Rupee - Retail segment (e₹-R) is planned for launch within a month in select locations in closed user groups comprising customers and merchants, the central bank said. The RBI has in the past said that there should be a degree of anonymity at least in small value digital transactions for it to become acceptable tender.

“Reasonable anonymity for small value transactions akin to anonymity associated with physical cash may be a desirable option for CBDC-R,” the RBI had said in its concept note.

In its concept note the RBI had also said that the CBDC is aimed to complement, rather than replace, current forms of money and is envisaged to provide an additional payment avenue to users, not to replace the existing payment systems.

The central bank has maintained that allowing virtual currencies such as Bitcoins to foster poses financial stability risks.