Banks in India have introduced CBDC

By Bala | Bala | 21 Jun 2023

Today I received an email from my bank saying that they have introduced Digital Rupee and they call it e₹. The email said that the RBI is doing a Pilot of CBDC with the help of ICICI Bank. I was so curious to go and explore more about this. I still have not created my wallet and explored this. I personally thought that this was a great step towards digitalization and accepting blockchain technology. I think this is very good news but there are also some considerations here. I will cover some of them in this article.

Looks like people who are signing up today and giving it a try would be the first few people to try out this new thing. More details about e₹ are available on the ICICI bank website and I wonder if this was the only bank that was selected for doing the pilot or if there were a few other banks too. But anyways this can take digitalization to a new level. I would also like to discuss the advantages that this technology would be bringing to us.

CBDC regulated by RBI

When we are excited about the introduction of CBDC, we have to understand that this is not our own RBI thing or our own country thing. Many countries are involved in this and the Central banks wanted to embrace this technology. One of the biggest advantages CBDC can bring is an additional level of security to the digital transactions that we are already doing. The current transactions even though they are digital, there is no actual digital currency moving around. Technically speaking it is just an update on the source database and a destination database. But with CBDC, that will not be the case there will be a proper transaction happening and we would have that data on a blockchain.

The regulation is very good here because the CBDC in circulation would match the exact number defined by the RBI and nobody can print money here. There will also be facilities where many vendors will start accepting CBDC as a payment method in addition to the UPI transactions we are already doing. I don't know what will happen to the existing digital transactions we are doing. Probably it would be replaced by CBDC completely.

CBDC is not a regular cryptocurrency

Many people misunderstand this as a regular cryptocurrency on top of some blockchain like Ethereum or Binance smart chain. Even though these blockchains have a facility to create tokens on them, CBDC is stand-alone and in the background, it is using blockchain technology to operate. We can consider CBDC as dematerialized bank notes. Instead of having physical notes in hand, CBDC would be with us and each one of us would have a wallet with which we can operate it.

Today I did a lot of reading about this and came to know many things. There is a huge conflict between crypto and CBDC. They don't accept CBDC as crypto because the value is not as volatile as crypto. But there is a high possibility that CBDC can get popular and become the future of crypto acceptance in India. I personally would see that happening only if we are able to see exchanges listing CBDC and providing a token pair to trade against BTC or other popular coins.


There have been many stablecoins in the last few years in the crypto world and most likely CBDC can be the expected stable coin for people to trade against it. They say that this is a government-backed digital currency and they don't call it a cryptocurrency but gradually that might happen too. Some of the things that CBDC offers are as follows:

  • Privacy
  • Transfer capability
  • Ease of use
  • Accessibility
  • Financial security to businesses and individuals

These features are really attractive and make it very similar to cryptocurrencies but we might have to see it in action and maybe the perspective might even change in the future on how we see this as.

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