RBI floats concept paper on digital currency

The RBI has proposed to introduce e-rupee. In a statement, the bank on Friday said that the digital currency will soon begin the pilot launch e-rupee for specific use cases. The purpose behind the issue of the concept note is to create an awareness about the central bank digital currency and the planned features of the digital rupee, it said. The concept note also discusses key considerations such as technology and design choices, possible uses of the digital rupee, and issuance mechanisms, among others”, the RBI said in a statement. The concept note states that the digital currency is a sovereign currency issued by the central banks in alignment with the monetary policy. It will appear as a liability on the central bank's balance sheet. The digital currency will be freely convertible against commercial bank money and cash. It will be a fungible legal tender for which holders need not have a bank account and must be accepted as a medium of payment, legal tender and a safe store of value by all citizens, enterprises and government agencies.

 The e-rupee will bolster India's digital economy, enhance financial inclusion and make the monetary and payment systems more efficient and the central bank's digital currency will be supported by the state-of-art payment systems of India that are affordable, accessible, convenient, safe and secure, it said. The digital currency should be developed as a platform which is highly scaleable to support very high volume and rate of transactions without performance degradation. It should be robust to ensure stability of financial ecosystem and have tamper-proof access control protocols and cryptography for safety of data among other features. The RBI called for a seamless access to digital currency by consumers. It also emphasised on an effective and efficient resolution of customer grievances through a robust mechanism.