Following the footsteps of China, India is all set to put a baby step towards launching its own central bank digital currency (CBDC). Even though the launch of a CBDC is still away, the country is launching its first digital currency that is named e-RUPI at 4:30 PM today. It will be launched by Prime Minister Narendra Modi.
Digital technology is transforming lives in a major way and is furthering ‘Ease of Living.’ At 4:30 PM tomorrow, 2nd August, will launch e-RUPI, a futuristic digital payment solution which offers several benefits for its users. https://t.co/UpLgtBl1K3
— Narendra Modi (@narendramodi) August 1, 2021
It is a voucher-based digital payment system developed by a collaboration of the National Payment Corporation of India (NPCI), the Department of Financial Services, the Ministry of Health and Family Welfare, and the National Health Authority.
In this article, we explain the concept of e-RUPI, how does it work and how can it be used in the best way by the common public.
What is e-RUPI?
It is a cashless and contactless mode of payment that will be received by the beneficiaries on their phones in the form of an SMS or QR code that can only be redeemed at certain centers made exclusively for this purpose. This way, the users will not have to carry any credit or debit cards anymore with them.
It is more like sending a Bitcoin from one address to another without involving any intermediary. The only difference between the two is that the value of e-RUPI does not keep changing like Bitcoin’s.
How does e-RUPI work?
Since it has been built by NPCI, the system has brought some banks on board who will be issuing these vouchers. When a government or a corporate agency wants to make a payment, it has to approach the partner bank that can be both private and public sector with the details of the beneficiary along with the reasons behind the payment.
The bank will then, send the voucher to the phone of the beneficiary identifying them by their phone number.
This way, the government has been planning to bring more transparency and speed into executing its schemes meant for necessary people.
What is the news on India’s CBDC?
The launch of e-RUPI is a great start to implementing the concept of digital currency in India but the main goal is still the central bank digital currency, also called CBDC. RBI deputy governor T Rabi Sankar said that CBDCs are desirable for a lot of purposes and the Reserve Bank of India is planning a phased implementation strategy.