Migrant fruit-seller near RBI headquarters in Mumbai now part of e-Rupee pilot – The Indian Express

The 45-year-old is part of the nationwide pilot project on using Central Bank Digital Currency (CBDC) or e-rupee — an initiative of the RBI itself.

“It’s been close to a month since I started accepting e-rupee. So far, two or three transactions worth Rs 300 have been made,” says Sahani, whose wife, son and daughter live in Vaishali.

According to him, RBI officials approached him last month and convinced him to start e-rupee transactions. They helped him open a separate IDFC First Bank account with a digital wallet to enable the transactions. For every transaction, he gets a notification on his phone.

The RBI launched a limited test of the retail digital rupee for specific use cases on November 1, 2022. The pilot covers select locations in a closed user group (CUG) comprising about 15,000 customers and merchants across the country. Sahani is among a few street vendors in Mumbai who are part of that group.

Although the volume of transactions seems to be low in the test phase, Sahani says vendors now have another option to accept payment from customers, apart from cash and the unified payment interface (UPI). There, however, appears to be some teething issues. If there is a delay in a transaction or if it fails, customers prefer paying using other digital payment modes, which are currently faster, says Sahani.

“There was a customer who paid me Rs 50 for fruit using e-rupee but after some days, the same customer was unable to make the CBDC transaction… But once vendors from whom I buy fruit start accepting e-rupee, I will also be able to pay them through CBDC. I have been told that I will be able to withdraw the money from the account once the ATM card comes, which they said will take three months,” he says.

The pilot covers Mumbai, New Delhi, Bengaluru and Bhubaneswar and will later be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. So far, four banks — State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank – are part of the first phase of the pilot. Four more — Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank — are slated to join subsequently.

The CBDC is legal tender issued by the RBI in digital form, which can be transferred electronically from one holder to another.

Announcing the launch of the pilot project from December 1, 2022, the RBI said it may be expanded gradually to include more banks, users and locations as needed. It said 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-rupee token and architecture will be tested in future pilots, based on the learnings from this pilot,” it said.

According to RBI, e-rupee will be issued in the same denominations as paper currency and coins. It will 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 and devices,” the bank said.

E-rupee transactions can be both person to person (P2P) and person to merchant (P2M). For P2M transactions, such as shopping, there will be QR codes at the location. Users will be able to withdraw digital tokens from banks in the same way they currently withdraw physical cash. Users will be able to keep the digital tokens in the digital wallet, and spend them online or in person, or transfer them via an app.