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e-Rupee
Context
A recent report highlighted that there has been a significant decline in usage of e-rupee, India’s digital currency, dropping to just one-tenth of its peak in December.
What is e-rupee?
- In 2022, the Reserve Bank of India(RBI) had launched the Central Bank Digital Currency (CBDC) — digital rupee or e-rupee (e?).
- A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiatcurrency and is exchangeable one-to-one with the fiat currency. Only its form is different.
- E-rupee is a digital form of currency issued by the RBI, akin to digital currency notes. It is regulated and backed by the RBI, ensuring it has intrinsic value and is recognized as legal tender.
- Types of CBDCs:
- Retail CBDCs:These are designed for general public use in everyday transactions, akin to the way physical cash is used currently.
- Wholesale CBDCs:These are intended for use by financial institutions for interbank settlements and other wholesale transactions, enhancing efficiency and security in large-scale financial operations.
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