has roped in at least five banks
to work with it on a pilot project for its digital currency
-- the Digital Rupee -- for the retail market
. According to a report in The Economic Times
, these banks
are State Bank of India, ICICI Bank, IDFC First Bank and HDFC Bank.
The report said, citing people familiar with the matter, that the Reserve Bank of India could add more banks
to run the pilot, which is expected to launch soon.
is working on two fronts to test the central bank digital currency
(CBDC): one for the wholesale market, for which a pilot project is already underway, and the other for retail (CBDC-R).
The central banker is also weighing whether to build a new framework for its digital currency
or make retail CBDC interoperable with the current digital payments system.
"Five banks have been shortlisted to run the pilot along with the help of NPCI
(National Payments Corporation of India) and RBI
. Some customer and merchant accounts will be chosen to roll out the retail digital rupee pilot soon," one of the persons told ET
In a concept note last month, RBI suggested it was considering anonymity for CBDC retail payments valued under Rs 50,000, just like people have when transacting in cash in small amounts.
Several countries are considering launching their own digital currencies after private cryptocurrencies took the world by storm. Based on the same blockchain technology, these CBDCs are aimed at reducing the dependence on cash.
The two types of CBDC -- retail and wholesale -- are conceptualised to serve specific purposes. While retail CBDC can be used by all, wholesale CBDC will have access restricted to select financial institutions.