India Central Bank To Start Pilot of Digital Rupee Tomorrow (reuters.com) 16
The Reserve Bank of India (RBI) will launch the pilot for a central-bank-backed digital rupee for the wholesale segment on Nov. 1, it said on Monday, identifying nine banks, including top lender State Bank of India, to participate in the project. From a report: The pilot's use case will be to settle secondary market transactions in government securities, with the e-rupee expected to make the interbank market more efficient, the RBI said in a statement. Settlements in central bank digital currency would reduce transaction costs, the RBI added. Besides SBI, the pilot will include Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC, the RBI said.
Bags of cash (Score:1)
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The digital money they currently transfer does not have the benefit of being completely tracked by the central bank, nor can the digital money banks send around today be forced to expire to make people spend it.
So as you can see, a government run CDBC is far superior - for the government...
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Help me out on this one. Are they currently transporting duffel bags of cash right now between banks? I thought pretty much all banks worldwide were electronic at this point.
Excellent question. They use intermediates, Clearing houses https://en.wikipedia.org/wiki/... [wikipedia.org] (you might recall this from the stories about meme stocks and the online trading platform Robinhood).
What the article doesn't mention, but the Reserve bank of India press release tells you, is that they can now avoid all that "Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk." Source: https:/ [rbi.org.in]
Potters everywhere rejoice (Score:5, Funny)
No longer will people have to run around their shops, smashing every pot in sight to get all the single rupees out of them.
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Reserve Bank of India Press Release (Score:2)
RBI vide Press Release dated October 7, 2022 had announced that the Reserve Bank will soon commence pilot launches of Digital Rupee (e) for specific use cases. Accordingly, the first pilot in the Digital Rupee - Wholesale segment (e-W) shall commence on November 1, 2022.
2. The use case for this pilot is settlement of secondary market transactions in government securities. Use of e-W is expected to make the inter-bank market more efficient. Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk. Going forward, other wholesale transactions, and cross-border payments will be the focus of future pilots, based on the learnings from this pilot.
3. Nine banks, viz., State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC have been identified for participation in the pilot.
4. The first pilot in Digital Rupee - Retail segment (e-R) is planned for launch within a month in select locations in closed user groups comprising customers and merchants. The details regarding operationalisation of e-R pilot shall be communicated in due course.
(Yogesh Dayal)
Chief General Manager
Source https://rbi.org.in/Scripts/BS_... [rbi.org.in]
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"Concept Note". Only quoting the preface:
Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank. While most central banks across the globe are exploring the issuance of CBDC, the key motivations for its issuance are specific to each country’s unique requirements.
This Concept Note explains the objectives, choices, benefits and risks of issuing a CBDC in India, referred to as e (digital Rupee). The e will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money.
The purpose behind the issue of this Concept Note is to create awareness about CBDCs in general and the planned features of the digital Rupee, in particular. The Note also seeks to explain Reserve Bank’s approach towards introduction of the digital Rupee. Reserve Bank’s approach is governed by two basic considerations – to create a digital Rupee that is as close as possible to a paper currency and to manage the process of introducing digital Rupee in a seamless manner.
The Concept Note also discusses key considerations such as technology and design choices, possible uses of digital rupee, issuance mechanisms etc. It examines the implications of introduction of CBDC on the banking system, monetary policy, financial stability, and analyses privacy issues.
The Reserve Bank will soon commence limited pilot launches of e for specific use cases. It is expected that this note would facilitate a deeper appreciation and understanding of digital Rupee and help members of public prepare for its use.
Full document: https://rbi.org.in/Scripts/Pub... [rbi.org.in]
money for bridges (Score:1)
I remember (Score:2)
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I fondly remember the days when, in 1920s Germany (before the Nazis gained power, thanks Allies,) and in Zimbabwe in the 2000s, people had to carry a wheelbarrow of cash to buy a gallon of milk. It reach the point where the energy to transport money to buy anything was worth less than the value of the money .. unless you burned it. Reference: https://historydaily.org/germa... [historydaily.org]
People ask "how did the Nazis take control?", well that's why. Desperate people are more likely to become blind to humanity.
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People ask "how did the Nazis take control?", well that's why.
That's actually not true. Hitler took control during a period of _deflation_.