Digital Rupee is Coming December 1st , Get ready!

Hold onto your wallets, the digital Rupee is coming December 1st! The Reserve Bank of India has
been talking about introducing the digital Rupee for a long time and starting Dec 1 some users will
be able to use e-Rupee to make transactions. With the digital Rupee, the broader wish of the central
bank is to execute a full-fledged launch of the CBDC (central bank digital currency) in the near future.
But what exactly is this digital Rupee? RBI Governor Shakti kanta Das explained that the e-Rupee is a
form of digital token that represents legal tender. Unlike cryptocurrencies, though, the digital Rupee
is issued in the same denominations as paper currency and coins currently in use. This means there
will be no need to change any prices or values when making the switch from regular cash to e-
Rupees. Phew!
The RBI has been working on this project for a while now, first announcing their intention to create a
CBDC back in April 2018. Since then, they’ve been testing various models and working out kinks to
create a system that is both secure and efficient. With December 1st right around the corner, it looks
like they’re finally ready to make their big debut.

So How Will It Work?

The switch from regular cash to payments using e-Rupees will happen in two ways: via
High Denomination (HD) notes or through prepaid Payment Instruments (PPIs). HD notes are
basically paper currency notes of Rs 500 and above that have already been extinguished and are no
longer in use . As for PPIs, these are things like mobile wallets and prepaid cards issued by banks or non-
bank entities like Paytm , Phonepe etc., that can be used to transact digitally.
Both methods will have their own aimed at benefiting a certain set of users. HD notes can be used
by those who don’t have access to use Prepaid Payment Instruments(PPIs) like wallets or those who
don’t have bank accounts . On the other hand, the PPI route can be used by people who want to move
away from CASH/HD notes asap or those with an account with any authorised non-bank PAD entity.
In terms of transactions ,the limit has been set at a maximum of Rs5,000 per day per user
thought here’s no limit on the number of transactions one can do in a day. Also , for high value
transactions that go beyond Rs5 , 000 , multiple codes can be used . The idea here being to better track
large amounts of funds transferred at once and also cutdown on possible fraudsters coping with
large hacks in one shot .
So there you have it ! The digital rupee complies with all KYC /AML norms and will hence
be transparent as any other form of e – payment we use today . It’ll also be easier to track funds when
compared to paper currency and should help tide us over during these unprecedented times where
a cashless economy seems like our best bet against the spread of COVID – 19 .What do you think about
this new development ? Let us know in the comments below!