“The e₹-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks,” the central bank said in a statement.

Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M), the central bank said.

Payments to merchants can be made using QR codes displayed at merchant locations.

Eight banks have been identified for phase-wise participation in this pilot. The first phase will begin with four banks – State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities. Later, Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join this pilot.

The pilot will initially be rolled out in Mumbai, New Delhi, Bengaluru and Bhubaneswar. It will be extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The scope of pilot may be expanded gradually to include more banks, users and locations as needed, the RBI said.

RBI Governor Shaktikanta Das had earlier this month said that the RBI will follow up on the wholesale e-rupee pilot with a similar trial on the retail side this month itself.

The broader wish of the RBI is to execute a full-fledged launch of the CBDC “in the near future”, Das said.