The Reserve Bank of India (RBI), the country's central bank, intends to launch a pilot project to test the retail digital rupee on December 1.
The trials will reportedly involve a "closed user group" of consumers and merchants.
In the first stage, the tests will be conducted in Mumbai, New Delhi, Bangalore and Bhubaneswar. The pilot will be expanded to nine more cities in the future.
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According to the press release shared by the central bank, the retail CBDC will be distributed through intermediaries, which will be banks.
Some of the banks taking part in the trials include State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank.
The RBI also reportedly intends to additionally connect four lending institutions to the project.
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The press release reads:
"Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations."