One of the ambitious projects of the Indian government is the Digital Rupee, often known as E-rupee. The launch of the digital rupee has finally begun. Although it is still in its early stages, demand is anticipated to rise. But let’s first grasp the fundamentals before diving into the intricacies and dynamics of the digital rupee.
What is digital rupee
We all have been in situations where we have ended with a damp or torn note or sometimes losing our cash entirely. But not anymore, as the name suggests “Digital rupee” is simply our regular cash in digital format. That’s it, that’s the very essence of the digital rupee. It is simply a counterpart of our coins and notes in digital denominations.
It can be kept in a digital wallet just like we keep cash in real wallets. E-rupee also comes in several denominations that are comparable to those we already use, such as 10, 20, 50, etc. It is also available in our coin denominations of 1, 2, 5, and 10.
Who owns the digital rupee?
In different parts of the world, physical currency have different names such as cash, bills, notes, etc. Just like that the digital version of currency is called CBDC.
CBDC stands for Central Bank Digital Currency, is the official digital currency of a nation and only the central bank of the nation has the authority to issue it. RBI which stands for Reserve Bank of India is the governing body that issues these CBDCs which we commonly refer it as a digital rupee.
From where can I buy Digital-rupee?
The process is quite similar to cash, RBI issues and prints physical Currency and distributes it to banks across India, we the consumers go to the bank or ATM and withdraw this cash. Just like that on issuing e-rupee by RBI it is distributed among banks. To get access to it we have to make an account which is simply our digital wallets on the bank website or their mobile application where we would be able to hold our e-rupee.
As this digital currency is our counterpart, it holds the same value as cash. This means ₹1000 of cash holds the same value as 1000 e-rupee in your wallet. So, when you want to buy let’s say 500 e-rupee you need to pay ₹500 for it.
This does raise a question, if I am paying online from a bank account of 500rs [which is already a digital payment] to acquire ₹500 worth e-Rs then how is it different from the money I hold in my bank account or digital transaction I make through UPI. Well to understand the differences you can click here to have a deeper understanding.
Where can I use it?
You can use E-Rupee practically anywhere and for anything. Similar to the QR codes used for UPI payments, businesses too utilize them to allow customers to pay with E-rupee. You can send this digital currency to your loved ones or use it to make purchases online. At the time of writing this blog, this project is in the early stage and hence this functionality is restricted to several selected cities by the government. To know the list of banks and cities authorized and selected in phase one of this project click here.
Conclusion
E-rupee is an emerging technology and it holds great potential. At this point, a lot of experimental work is required to solidify its framework. It will be a while before it is fully become established.
If the Digital rupee has made you curious and wonders about its implications, purpose, and impact on day-to-day life, below is the list of articles we recommend to read. We have discussed important aspects such as the impact on Indian economics, merits, and demerits, and the infrastructure behind the digital rupee. You can refer to those articles below.