How Does the Digital Rupee Work?
How Does the Digital Rupee Work?
As part of the pilot programme, select HDFC Bank customers have the chance to become a part of India’s e₹ initiative.
Cash vs e₹
e₹ is closest in comparison to cash. When you pay cash, the physical note/coin goes from your wallet to someone else’s. Similarly, a user transfers e₹ from their e₹ Wallet to someone else’s.
UPI vs e₹
Unlike e₹, which is a currency, UPI is only a payment system which allows transfer of money from one bank account to another through an intermediary.
Bitcoin vs e₹
A cryptocurrency is a decentralized asset where transactions between parties are settled by a pool of users. In e₹, the central bank takes responsibility for ensuring the transactions are settled.
Besides, e₹ will enjoy the same stability in value as the rupee while cryptocurrencies can be very volatile.
e₹ as a legal tender issued by a central bank in a digital form. The conversion rate is 1 e₹ = 1 Rupee. e₹ shall be accepted as a medium of payment, legal tender and a safe store of value.
e₹ will work in the same way as bank notes and coins – if you possess them, you can use them in lieu of cash. You may store e₹ in your bank’s e₹ app. The digital wallet works in the same way as your cash wallet, except these transactions will be entirely paperless.
You can either conduct e₹ transactions anonymously, simply by obtaining the sender/receiver’s phone number or QR code, or you can opt for account-based e₹ transactions.
UPI/NEFT/RTGS/IMPS are all forms of digital payments. e₹ is a digital form of currency and is a legal tender provided by RBI that is similar to physical cash, but in a digital form.
e₹ is an RBI digital currency. It is like cash in a digital form which has a value as per the denomination of the currency. On the other hand, cryptocurrencies like bitcoins are public currencies (not backed by RBI).
For the pilot phase, bank will reach out to customers selected for the e₹ pilot program. Customers who wish to participate will follow the steps given below: