Pilot for digital rupee for wholesale segment to commence on November 1

The Reserve Bank of India (RBI) on Monday said it will commence the first pilot of the central bank digital currency (CBDC) – the digital rupee – for the wholesale segment from November 1. The use case for this pilot will be settlement of secondary market transactions in government securities.

In a statement, RBI said, the use of the digital rupee is expected to make the inter-bank market more efficient, as settlement in central bank money will 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,” the RBI said.