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Hard cash, made easy | Digital Rupee will enhance financial inclusion: Fintech industry

Digital currencies have many benefits like zero currency loss and lower operational costs associated with physical cash management.

December 01, 2022 / 06:19 PM IST
Representative image.

Representative image.

The Reserve Bank of India (RBI)’s Central Bank Digital Currency (CBDC) may turn out to be the only long-term digital transaction to remain free of cost, with enhanced security compared to other forms of digital assets, said several payment industry bodies and fintech start-ups amid the launch of the first pilot for the retail digital Rupee starting December 1.

While wholesale CBDC, i.e., e₹-W, is for select financial institutions to use for interbank transfers, retail CBDC, i.e., e₹-R is for businesses and individuals for use in peer-to-peer (P2P) and person-to-merchant (P2M) payments.

"Retail CBDC will be a game changer. While the Unified Payments Interface (UPI) provides the features of fund transfer, this can become 100X bigger since it replaces cash transactions with digital currency directly issued by the RBI,” said Navin Surya, Non-Executive Chairman of the Fintech Convergence Council of India.

In terms of user experience, the digital currency will be similar to UPI and digital wallets.