Retail CBDCs will primarily be used for retail payments like "cash". It will be a Digital Rupee (e ₹-R) denoting legal tender in the form of a digital token and issued in the same denomination as paper currency and coins and will be distributed through intermediaries, i.e. banks.
New Delhi: IDFC First Bank has partnered with ToneTag, a global proximity and voice tech solutions provider, to enable acceptance of digital rupee at merchant outlets. This follows a pilot launch of a Central Bank Digital Currency (CBDC) for retail users by the Reserve Bank of India (RBI).
A month after the RBI tested the wholesale CBDC, it launched a pilot for the retail digital rupee (E₹R) on December 1 with four banks across four cities, including IDFC First Bank.
As part of the pilot, the digital currency is issued in uniform denominations and distributed through financial intermediaries and users will be able to transact through digital wallets offered by participating banks.
CBDCs will primarily be used for retail payments, similar to "cash". It will be a Digital Rupee (E ₹-R) denoting legal tender in the form of a digital token and will be issued in the same denominations as paper currency and coins. Distributed through intermediaries, ie banks. According to RBI, users will be able to transact with e₹-R through digital wallets offered by participating banks and stored on mobile phones or hardware wallets for person-to-person (P2P) convenience . and person-to-merchant (P2M) transactions. E ₹-R will continue to offer the security, trust and convenience of physical cash of final settlement. In the case of cash, it will not earn any interest and can be converted to other forms of money, such as deposits in banks.
Madhivanan Balakrishnan, COO, IDFC FIRST Bank said, “This solution will transform the way merchants transact and IDFC FIRST Bank is a proud partner in this collaboration. Another step in that direction. As a bank that strongly believes in 'customer first' approach, this initiative aligns well with the same."
Kumar Abhishek, Founder and CEO, ToneTag, said, “We are delighted to collaborate with IDFC First Bank and participate in the first phase of the CBDC retail pilot. In this pilot, ToneTag will provide solutions through which merchants will be able to accept digital currency. With this launch, India becomes one of the few countries globally to have taken this leap to digitize cash and facilitate payments and securities settlement, while mitigating counterparty credit and liquidity concerns. has leveraged its potential to increase efficiency. This is really going to be India's decade and many kudos to the RBI."
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