Govt and RBI actively engaged to improve central bank digital currency

RBI’s digital currency: The government and the Reserve Bank are actively engaged in improving the central bank digital currency (CBDC) so that it can be used for cross-border payments, Finance Minister Nirmala Sitharaman said on Thursday.  The apex bank has begun the pilot project wholesale CBDC and picked up nine banks — State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank, and HSBC.

The e-rupee is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries, i.e. banks. Users can transact with e-rupee through a digital wallet offered by the participating banks.

Besides, RBI has already rolled out a pilot in the retail version of CBDC or the e-rupee on December 1, 2022. The e-rupee is in the form of a digital token that represents legal tender.

“We strongly believe it helps in cross-border payments. It will bring in greater transparency and traceability…,” Sitharaman said while speaking at an event to mark 125 years of Hindu College.

According to Sitharaman, e-rupee helps speed up payments with less cost, she said, adding it brings down the cost of inward and outward remittance. 

While throwing light on India’s agriculture sector, FM Sitharaman said, ”Agriculture retains its primacy and we are looking at strengthening agriculture by modernizing some of the practices, post-harvest practices and so on,” she said.

In manufacturing, she said, the government had identified 13 sunrise sectors including renewable energy, semiconductor, machine learning, earth sciences, and space.