India's own 'Digital Rupee' will be launched in November

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The RBI has announced that it will launch a digital version of the rupee for retail purposes within the next month. 

The Reserve Bank of India (RBI) is set to launch a central bank digital currency (CBDC) after announcing its digital rupee project in February. The CBDC will be made available in select locations first, with plans to roll it out nationwide.

The Reserve Bank of India (RBI)’s digital rupee project explores the feasibility of issuing a CBDC in India.

The Reserve Bank of India (RBI) announced on October 31 that the central bank of India would launch the digital rupee pilot for the wholesale segment on November 1.

Nine banks will participate in the pilot, including the State Bank of India. According to Reuters, the other banks involved in the pilot are Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC.

The Reserve Bank of India (RBI) has announced that the main use case for its upcoming central bank digital currency (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 transaction costs of settlements, the RBI said. This will help to boost the efficiency of financial markets in India and make it easier for businesses to transact.

Wholesale CBDCs are a type of CBDC mainly used by financial institutions, such as banks. They are usually involved in interbank transactions, such as securities settlement and cross-currency payments. Wholesale CBDCs are used by financial institutions, while households and businesses use retail CBDCs. Retail CBDCs allow users to make payments directly and store value via the digital version of a specific fiat currency, like the Indian rupee. According to a new report, the RBI plans to launch the digital rupee for retail users within the next month. The digital currency will initially be available in select locations, but the RBI plans to roll it out more broadly over time.

In February 2022, Indian Finance Minister Nirmala Sitharaman announced plans for a digital rupee, which she said would be a “big boost” for India’s economy. The RBI subsequently proposed a three-step graded approach for its rollout, intending to minimise disruption to the traditional financial system.

The Indian government has been rushing to develop it's Central Bank Digital Currency (CBDC) but taking measures to make crypto less attractive for local investors. These include adopting a 30 per cent tax on digital asset holdings and transfers in April.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.