{"id":40815,"date":"2025-10-27T07:49:38","date_gmt":"2025-10-27T02:19:38","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=40815"},"modified":"2025-10-28T15:57:29","modified_gmt":"2025-10-28T10:27:29","slug":"e-rupee-2","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/e-rupee-2\/","title":{"rendered":"Making e-rupee at par with paper currency"},"content":{"rendered":"<h2>What\u2019s in today\u2019s article?<\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>What is Central bank digital currency (CBDC) or e-rupee?<\/li>\n<li>Key highlights of the speech delivered by RBI Governor<\/li>\n<\/ul>\n<h2>Why in News?<\/h2>\n<p>RBI Governor Shaktikanta Das said that permanent deletion of transactions can make the e-rupee or central bank digital currency (CBDC) become anonymous and make it at par with paper currency.<\/p>\n<p>He made those remarks while speaking at the BIS Innovation Summit.<\/p>\n<h2>What is Central bank digital currency (CBDC) or e-rupee?<\/h2>\n<ul>\n<li><strong>About<\/strong>\n<ul>\n<li>CBDC is the legal tender issued by a central bank in a digital form.\u00a0\n<ul>\n<li>The digital rupee (e-Rupee) is the digital currency launched by Reserve Bank of India.<\/li>\n<\/ul>\n<\/li>\n<li>It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, only its form is different.<\/li>\n<li>The central bank creates the CBDC and the banks distribute it.<\/li>\n<li>To widen the reach of the e-rupee, the RBI recently announced the participation of non-banks in the pilot.\n<ul>\n<li>The idea is that their reach can be leveraged for distribution of CBDCs and for providing value-added services.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Launch of Digital Rupee<\/strong>\n<ul>\n<li><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/reserve-bank-of-india\/\" target=\"_blank\">RBI<\/a> has demarcated the digital rupee into <strong>two broad categories<\/strong>: <strong>general purpose (retail) and wholesale<\/strong>.\n<ul>\n<li>This demarcation is based on the usage and the functions performed by the digital rupee and considering the different levels of accessibility.<\/li>\n<\/ul>\n<\/li>\n<li>From November 1, 2022, RBI launched its first pilot project to use digital rupee in the <strong>wholesale market for secondary trade in government securities<\/strong> (<a href=\"https:\/\/vajiramandravi.com\/current-affairs\/what-are-g-secs-and-rbis-open-market-operations\/\" target=\"_blank\">G-secs<\/a>).<\/li>\n<\/ul>\n<\/li>\n<li>From December 1,2022, <strong>retail digital rupee<\/strong> (e-R) pilot was launched.\n<ul>\n<li>In effect, the retail e-rupee is an electronic version of cash, and will be primarily meant for retail transactions.\u00a0<\/li>\n<li>It is available for use by all \u2014 the private sector, non-financial consumers and businesses. It will be distributed through intermediaries, i.e., banks.<\/li>\n<li>It will not earn any interest and can be converted to other forms of money, like deposits with banks.<\/li>\n<\/ul>\n<\/li>\n<li><strong>CBDC is non-remunerative<\/strong>\n<ul>\n<li>India has made CBDC non-remunerative, by making it non-interest bearing to mitigate any potential risks of bank disintermediation.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Introduction of offline functionality in Central Bank Digital Currency (CBDC) -Retail<\/strong>\n<ul>\n<li>In February 2024, the RBI announced to introduce an offline functionality in CBDC-Retail for transactions in areas with poor or limited internet connectivity.\n<ul>\n<li>The CBDC Retail (CBDC-R) pilot currently enables Person to Person (P2P) and Person to Merchant (P2M) transactions.\u00a0<\/li>\n<li>It is now proposed to enable additional functionalities of <strong>programmability and offline capability<\/strong> in CBDC retail payments.\u00a0<\/li>\n<li>Programmability will facilitate transactions for specific\/targeted purposes.<\/li>\n<li>Offline functionality will enable these transactions in areas with poor or limited internet connectivity.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Key highlights of the speech delivered by RBI Governor<\/h2>\n<ul>\n<li><strong>CBDC transferable in the offline mode<\/strong>\n<ul>\n<li>He said that India is also working on making the CBDC transferable in the offline mode along with introducing the programmability feature to help its financial inclusion goals.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Anonymity can be addressed through legislation and\/or through technology<\/strong>\n<ul>\n<li>Since the introduction of the CBDC in late 2022, there have been concerns about the privacy aspect.<\/li>\n<li>Many experts have said that the electronic nature will leave a trail of where all the currency has been used, unlike cash which offers anonymity.<\/li>\n<li>In this context, the governor said that the anonymity can be addressed through legislation and\/or through technology.\u00a0\n<ul>\n<li>For example, through permanent deletion of transactions.<\/li>\n<\/ul>\n<\/li>\n<li>The basic principle is that CBDC can have the same degree of anonymity as cash, no more and no less.<\/li>\n<\/ul>\n<\/li>\n<li><strong>UPI (unified payment interface) still popular among retail users<\/strong>\n<ul>\n<li>Despite the efforts which are being undertaken by the Reserve Bank, the RBI still sees preference for <a href=\"https:\/\/vajiramandravi.com\/upsc-daily-current-affairs\/prelims-pointers\/upi\/\" target=\"_blank\" rel=\"noopener noreferrer\" target=\"_blank\">UPI<\/a> (unified payment interface) among retail users.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q.1. What is Unified Payments Interface (UPI)?<\/h3>\n<p>Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India (NPCI) in 2016. It allows users to make instant peer-to-peer (P2P), person-to-merchant (P2M), and person-to-person-merchant (P2PM) transactions using a mobile app.<\/p>\n<h3>Q.2. What is Fiat money?<\/h3>\n<p>Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed.<\/p>\n<p>Source: <a href=\"https:\/\/indianexpress.com\/article\/business\/permanent-deletion-transactions-e-rupee-anonymous-shaktikanta-das-9312058\/\" target=\"_blank\" rel=\"nofollow noopener\">Permanent deletion of transactions can help make e-rupee anonymous: Shaktikanta Das<\/a> | <a href=\"https:\/\/www.thehindu.com\/business\/permanent-deletion-of-transactions-can-help-make-e-rupee-anonymous-das\/article68147054.ece#:~:text=Governor%20Shaktikanta%20Das%20on%20May,at%20par%20with%20paper%20currency.\" target=\"_blank\" rel=\"nofollow noopener\">The Hindu<\/a> | <a href=\"https:\/\/www.livemint.com\/economy\/rbi-mpc-meeting-2024-live-monetary-policy-committee-review-shaktikanta-das-india-economy-repo-rate-interest-rate-11707331135103.html\" target=\"_blank\" rel=\"nofollow noopener\">Live Mint<\/a> | <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/rbi-announces-offline-transactions-for-digital-rupee-heres-what-new-cbdc-move-means\/articleshow\/107515576.cms\" target=\"_blank\" rel=\"nofollow noopener\">Times of India<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The digital rupee (e-Rupee) is the digital currency launched by Reserve Bank of India.<\/p>\n","protected":false},"author":5,"featured_media":40816,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-40815","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=40815"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/40816"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=40815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=40815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=40815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}