India's first Digital Rupee pilot project will commence on Tuesday with nine banks, including SBI, HDFC Bank and ICICI Bank, issuing the virtual currency for transactions in government securities.
The first pilot in the Digital Rupee - Wholesale segment shall commence on November 1, 2022, the Reserve Bank of India (RBI) said in a statement on Operationalisation of Central Bank Digital Currency-Wholesale (e₹-W) Pilot, PTI reported.
It also announced that the first pilot in Digital Rupee - Retail segment is planned for launch within a month in select locations in closed user groups comprising customers and merchants.
The use case for the pilot is settlement of secondary market transactions in government securities, the RBI said regarding the maiden project starting Tuesday. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.