RBI with a revolutionary introduction of e-rupee – here’s what you need to know!
The Reserve Bank of India (RBI), the central bank of India, is increasingly engaged in developing the digital currency e-rupee. After introducing e-rupee to replace cash, RBI is now planning to introduce new features to enhance the popularity of e-rupee among users. E-rupee is based on distributed ledger technology, ensuring fast and secure transactions. RBI intends to introduce offline mode and “programmability” to e-rupee, allowing for more diverse use of this digital currency.
According to RBI’s plan, users will be able to utilize e-rupee not only in online mode but also in offline mode. This will enable people living in areas with weak internet connectivity, as well as those who prefer traditional cash transactions, to easily use e-rupee. Furthermore, the “programmability” of e-rupee will open new possibilities for governmental agencies and companies. The government will be able to program specific benefits requiring e-rupee payments, and companies will have the ability to program their employees’ expenses.
The new features of e-rupee will be introduced gradually, with testing conducted through pilots. RBI is also collaborating with banks to add additional features and promote e-rupee. In December, banks in India disbursed some employee benefits using e-rupee to expedite RBI’s goal of achieving one million e-rupee transactions per day by the end of 2023.
Further proposals by RBI concern additional features of e-rupee. The central bank suggests introducing validity periods and geographical restrictions for e-rupee. This will allow for the control and limitation of e-rupee usage within specific times or places. There is also an idea for offline solutions in remote and hilly areas where internet connectivity is weak.
Considering the security of digital payments, RBI also proposes the implementation of a rules-based framework for authenticating payment transactions. Currently, the payment system in India primarily relies on one-time SMS passwords, which do not always provide sufficient security and often fall victim to fraud. The new framework aims to enhance the security of e-rupee transactions and protect users from potential scams.
RBI’s e-rupee development initiative is another step towards digitizing and modernizing the financial sector in India. RBI is involved in creating new solutions that are expected to bring numerous benefits to both individuals and institutions. The article is sourced from Reuters and authored by Siddhi Nayak and Mrigank Dhaniwala.
