What is e-Rupee, India’s Digital Currency?

The number of deals involving India’s digital currency, the e-Rupee, has dropped sharply, falling to a tenth of what it was in December. At the end of last year, there were 1 million retail sales every day. Now, there are only 100,000 transactions every day.

Introduction to e-Rupee

The e-Rupee was launched on December 1, 2022, by the Reserve Bank of India (RBI) as a Central Bank Digital Currency (CBDC). It is a digital equivalent of the traditional rupee and is designed to function as a legal tender for all types of financial transactions.

Types of CBDCs

CBDCs are categorized into two main types:

• Retail CBDCs: It is meant to be used by the public via digital wallets, smartphone apps, or other payment systems.
• Wholesale CBDCs: It is used by banks to settle transactions between banks and for other large-scale financial activities.

Issuance & Acquisition of e-Rupee

The Reserve Bank of India (RBI) provides e-Rupees, which are electronic tokens with values that are similar to real money. These tokens are given out by commercial banks and can be bought with digital wallets that are offered by licensed financial institutions. With features like scanning QR codes and cell number transactions, E-Rupee makes it possible for people to buy and sell things with each other and with businesses. Gateways for the Unified Payments Interface (UPI) make the transfers go smoothly.

Advantages of Using e-Rupee

• Financial inclusion: This makes it easier for everyone, including people who don’t have bank accounts, to use digital financial services.
• Efficiency: Speeds up transactions and lowers costs compared to standard banking.
• Security and transparency: Uses blockchain technology to make sure transfers are safe, lowering the risk of fraud.

Month: Current Affairs - June, 2024

Category: Economy & Banking Current Affairs - 2024