The “pros and hazards” of digital money are examined by RBI: Why do we require e-Rupee and what is it?

A 51-page white paper regarding the e-Rupee has been released by the Reserve Bank of India. It covers the function and characteristics of the digital money used in India.
Visit this page for further details about the e-Rupee.

The Reserve Bank of India published a thorough concept note on October 7, 2022, outlining the “objectives, alternatives, advantages, and dangers” associated with legalising the Central Bank Digital Currency (CBDC). The term “e” or “digital Rupee” will be used to describe India’s digital currency. It represents a significant advancement in the creation of an electronic money for India. While there may be various myths or falsehoods concerning the e, here is everything you need to know.


In contrast to physical cash or central bank reserve/settlement accounts, CBDC or e are “novel varieties of central bank money.” CBDC will be regarded as being comparable to tangible sovereign money once the central bank distributes it. It ought to be acknowledged as a form of payment equal to legal cash.

The ability for people to hold value in the form of CBDC will also be permitted. In addition, the paper released by the RBI notes that the e would be freely convertible against cash, be regarded as fungible legal tender, and reduce the cost of issuing money.


The decline in use of paper currency is becoming a challenge for the Indian central banks. Additionally, a number of nations are limiting the actual transfer of currency in favour of quicker and more practical digital payment methods. Last but not least, the goal of the central bank is to “address the public’s desire for digital currencies,” which is now met by privately controlled virtual currencies, more popularly known as cryptocurrencies.

Overall, the e will be a virtual version of Indian currency that is centrally controlled. According to the concept note, “the e-system would support India’s digital economy, improve financial inclusion, and improve the efficiency of the monetary and payment systems.” India currently has easy, inexpensive, and accessible digital payment systems in place, and these systems may be modified to allow e₹.


Currently, there appears to be agreement among the central banks to release two different types of e-currencies “depending on the usage” and the intended use. These include CBDC-R for retail, which can be accessible to all individuals and firms operating in the private sector. In contrast, financial institutions could have access to the CDBC-W.

The optimum technique to produce and administer digital currency, as well as whether CBDCs should carry interest and whether they should be account-based or token-based, are all being determined by Indian financial institutions. It is crucial to keep in mind that even though the RBI just published a concept note regarding the Indian digital currency, the currency has not yet been made public.

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