E-Rupee : Reserve Bank of India ( RBI ) will trial Central Bank Digital Currency (CBDC) with its officials. The central bank recently deposited a part of the allowance in the CBDC wallet of RBI officials. It is being considered as a step by central banks to provide a secure and smart payment option as well as to counter cryptocurrencies. CBDC is a digital form of fiat currency. It is a sovereign paper currency, which is issued digitally by the country's monetary authority.

When was the money deposited?

According to an internal directive sent to senior officials on December 27, as reported by ET, “In order to scale up the CBDC retail pilot and encourage usage of CBDC wallets by bank (RBI) officials, it has been decided to credit the reimbursement amount for internet/data charges in the CBDC wallets of officials”.

A user manual has been issued to update the CBDC wallet. RBI launched the pilot for retail digital or e-rupee in December 2022.

No interest is received

Unlike traditional deposits, CBDC is a liability of the central bank. When an account holder converts some money in a savings account into CBDC, the bank's deposit balance is reduced by that amount.

Moreover, CBDC does not provide any interest return (like normal bank deposits) to the owner of the digital wallet. As a result, neither banks nor customers are particularly interested in CBDC so far.

did not get big success

Some banks have taken steps similar to RBI's plan, but CBDC has not gained much success as a currency for payment. Also, due to the high use of UPI and the use of mobile phones for shopping and fund transfer, retail users have not connected with CBDC.