Digital Rupee: Concerns and Doubts and clear answers to them


With the introduction of digital rupee or e-rupee, public doubts about it are increasing. In the first phase, participating banks will need to open a CBDC account with the Reserve Bank. Transactions between banks and the Reserve Bank are done through this.


How to reach the customer?

Currently, customers can purchase and transfer digital rupees through the apps of Yes Bank, SBI, ICICI and IDFC First Bank, the 4 banks that the Reserve Bank has initially approved for digital rupee transactions. Soon RBI will add 4 more banks to this list. But once this first phase is over, the RBI will deliver digital rupees directly to customers through the app without the need for banks. Intermediaries such as banks will be excluded from e-rupee transactions in future. This means that the relationship between the customer and the Reserve Bank will come directly. The first phase will be implemented in the cities of Mumbai, New Delhi, Bengaluru and Bhubaneswar. In the second phase, it will be extended to other cities.

Can digital rupees be exchanged with paper currency?

∙Digital rupees can be exchanged with paper currency. After the first phase of testing with selected customers, RBI will give clear instructions on how to use it for everyone.

Does Digital Rupee require no bank account?

∙Its owners do not need a bank account. CBDC will appear as a ‘liability’ (currency in circulation) on RBI’s balance sheet. But now customers can get e-rupees through participating banks’ apps. Soon the government will launch a BHIM-like app for e-rupees. Then there is no need to depend on banks.

Who is responsible for digital currency?


∙Digital Rupee is the sole responsibility of the Reserve Bank. Currently, e-rupee transactions are done through the app of some banks. However, it is expected that the Reserve Bank app will come directly in the future

Will digital rupee replace paper currency?

∙Experts suggest that digital rupee is likely to replace paper currency within days. Digital Rupee was introduced as part of a step towards Digital India.

What is the digital rupee limit?

∙RBI has not set any limit for keeping digital rupees in wallet. Digital rupee transactions above Rs 2 lakh are likely to be reported for tax purposes.

Does digital rupee earn interest?

∙ Digital rupees do not earn interest. Because it deals directly with the customer by avoiding middlemen like banks.

Why transact through select banks if you don’t want banks?

∙It is still not fully developed. What is happening right now is the experiment of digital rupee. That is why selected banks are included in it. Later, the banks will be completely abandoned and RBI will conduct the affairs directly through the app.

Will digital rupees be useful for common people?

∙ In the future, the digital rupee can even be used as a substitute for Kisan credit cards, says the RBI governor. This means that the Reserve Bank aims to bring more people from different sectors into it.

Is it better for individuals or corporations?

∙ Digital currency is more useful for corporate businessmen than individuals as settlement does not take much time.

Will RBI launch digital rupee app?

∙Experts say that the government is likely to launch an app for e-rupees. However, it is not clear when. After the pilot, it is suggested that the RBI app will be released with necessary changes.

What is the difference between UPI and Digital Rupee?


∙One of the main differences between UPI and eRupee wallet is that eRupee wallet does not need to be linked to any bank account. But customers need to link the wallet with their bank account to make transactions through UPI.

Has digital currency gone global?

∙Though it is currently being implemented within the country, RBI believes that it will be accepted globally in the future.

What is the real need for digital rupee?

∙ Requirement of bank account and debit card is a major challenge faced by rural people. Many surveys have indicated that even people with Jan-Dhan accounts do not have a valid debit card as a major problem. The fact that no bank account is required while using eRupee will be of great benefit to rural people.

Want a smart phone for digital rupees?

∙Designed in such a way that even people who use a normal phone that is not a smart phone can use the e-rupee wallet.

Do you need KYC for this? ∙Separate KYC process will be conducted for eRupee Wallet. Hence, even people without bank accounts can own an eRupee wallet after completing the KYC process for the wallet.

Will there be a cyber attack on digital rupee wallet?

The RBI concept paper says the digital rupee is susceptible to cyber-attacks similar to existing payment systems.

Many people now think that e-rupee is just like internet banking. If it becomes widely used, more advantages and disadvantages will be understood by the individuals and the RBI. This has the advantage that the Reserve Bank can fully control the country’s currency system. With the advent of e-rupee, there is no doubt that the services of banks will come in a modified new way in the near future. Another important change brought about by e-rupee is that middlemen called banks will be eliminated in future. There is also public opinion that e-rupee does not succeed when there are popular apps like UPI. The Reserve Bank also acknowledges that the e-rupee will not be fully accepted