The launch of e-rupee is quantum leap in digital currency and could revolutionise monetary system
The Indian rupee is now available in its digital avatar, albeit with limited scope. With the launch of digital rupee by the Reserve Bank of India, the country has taken one more definite step towards digitization of Indian currency. Though there was hesitation initially in the government about digital currency based on block chain technology. When the government banned crypto currencies, which are also in the same league, many people thought that India would be left out in the digital race of currencies. Though the crypto still remains banned in India but the government has finally decided to launch its own. The digital rupee would enable people to make digital payments through UPI without a bank account. They could avail the e-wallet provided by the Reserve Bank. India has one of the most technologically-evolved currencies in the world, and the e-rupee will enable digital payments and improve financial inclusion which may be a boon to millions as the digital payment system would eliminate leakages completely. A central bank digital currency (CBDC) can play a key role in instilling confidence of the people in the digital currency unlike crypto currencies which do not enjoy backing of any central bank.
The rollout of the e-rupee has been one of the most sought-after developments, since its announcement in the FY23 Union budget. The digital rupee is a big bold step the journey toward digital payments. The initiative has started in the low volume, high-value wholesale (interbank) segment from where learning would be used to roll out reliable, built-to-scale retail payments.The pilot involves nine banks, including the SBI, the Bank of Baroda, the HDFC Bank, the Yes Bank, the Kotak Mahindra Bank, and the ICICI Bank, settling secondary market transactions in government securities. If the soft launch of e-rupee is successful it would soon see a full rollout. The digital rupee is expected to boost the reach of payment and financial needs of a wider category of users while ensuring transparency and low operational cost, and in this regard, it is encouraging to witness the RBI's support for innovation in creating a world-class digital ecosystem. If the e rupee becomes a popular mode of digital payments it would pave the way for other crypto currency to become legit. E-rupee could be a game changer in monetary system which has is opaque, cash dependent, and highly-inefficient.
