A vendor counts Indian currency notes at a vegetable market in Mumbai, India, Aug. 30, 2018. (Xinhua/Stringer)

India announced plans to test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time, with the support of the country’s central bank.

MUMBAI, Jan. 2 (Xinhua) — India is contemplating transactions in digital currency as the country’s central bank, the Reserve Bank of India (RBI), has launched a pilot program both in retail and wholesale sectors.

The first pilot project for wholesale business in the Central Bank Digital Currency (CBDC) or digital rupee was launched on Nov. 1, 2022. One month later, the first pilot project for the retail digital rupee was unveiled on Dec. 1.

CENTRAL BANK DIGITAL CURRENCY

A CBDC or digital rupee is a digital form of currency notes issued by the central bank. Digital currency is an electronic form of money that can be used in contactless transactions.

Federal Finance Minister Nirmala Sitharaman proposed to introduce digital rupee, using blockchain and other technologies, to be issued by the RBI starting 2022-23 in her budget speech on Feb. 1, 2022.

Retail CBDC (CBDC-R) is potentially available for use by all, while wholesale CBDC (CBDC-W) is designed for restricted access to select financial institutions.

The RBI has identified nine banks for participation in digital rupee’s wholesale pilot. These include State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak…