India’s central bank plans to expand the use cases of the virtual version of the currency following the completion of the ongoing pilot project with the digital rupee, reported The Economic Times.
The Reserve Bank of India is looking to onboard more banks to test a wider variety of use cases.
“Based on the learnings from the current pilot, other features and applications of e-rupee token and architecture may be tested in future pilots,” the RBI said in its financial stability report.
“The first phase has begun with four banks, and more banks will join this pilot subsequently.”
The first pilot of the digital rupee was launched last month in a closed user group of retailers and customers in select locations.
RBI believes the e-rupee will offer the public a risk-free mode of exchange with features of physical cash.
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Currently, person-to-person (P2P) and person-to-merchant (P2M) transaction use cases are being tested.
RBI also plans to test the process of the digital rupee creation, distribution and retail usage in real-time, the report said.
Furthermore, the wholesale rupee project will be expanded to more wholesale transactions and cross-border payments.
“Wholesale digital rupee is expected to make the inter-bank market more efficient and reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk,” the banking regulator said.
“Based on the learnings from this pilot, other wholesale transactions and cross-border payments will be the focus of future pilots.”
On 1 November 2022, nine banks began a pilot programme for the e-rupee in the wholesale sector to settle secondary market transactions in government securities.