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All about e-rupee(DIGITAL RUPEE)

The RBI released a concept note on digital rupee (e-rupee) today. I think this marks a landmark in India's economic history. But what does it mean for you? A short explainer from a retail point of view.

What is e-rupee (digital rupee)?

Digital version of the Indian rupee. RBI has proposed to issue two versions - wholesale for interbank settlement and retail for the public. How will retail work? You will hold the digital rupee in a wallet with a bank or service provider.


Can you mine it?

No. RBI will issue it. It cannot be mined like bitcoin. So you don't have to worry about the energy use and environmental implications so much.

How do you transfer e-rupee?

The retail version of the digital rupee is token based. Broadly, this means, you find out the recipient’s public key (think of it like an email address) and transfer money to them using your private key (essentially, a password).

Will it be anonymous?

For e-rupee, the RBI concept note has proposed partial anonymity where small amounts can be anonymous but not large amounts.

Why should you hold it?

Transacting in e-rupee can take away the inconvenience of carrying around physical notes and coins. Other than that, I cannot think of big benefits from an individual point of view. RBI has outlined some benefits from a government point of view.

Can it be programmed?


Yes, possibly. For example, it can be given a limited life, allowing RBI to stimulate demand when needed and withdraw demand when not needed. However such features can affect its acceptance and so the RBI is likely to tread cautiously with such features

Can you use it, if your net is down?


RBI has proposed offline functionality for the digital rupee - meaning you can transact without the net. However this can cause duplication (the same rupee transferred to multiple people for example) and RBI is trying to figure out solutions.


source  https://m.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1218

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