RBI Digital Rupee: PhonePe, Paytm, Google Pay to be replaced by Digital Rupee? Know how it will work

RBI digital rupee: The launch of the retail digital rupee on December 1 under the first pilot project has been announced by the central bank of the country; the Reserve Bank of India. The majority of people also refer to it as CBDC or Central Bank Digital Currency. The RBI's digital currency will facilitate cashless transactions and simplify a number of processes. 

Are UPI and mobile wallet going to be replaced by the new payment system?

The new payment system won't directly compete with UPI and Mobile Wallet in terms of digital currency, but it will allow customers another method of payment, according to experts. Customers can purchase digital currency from the bank once, move it from one wallet to another, or use it to make purchases.

UPI and digital rupee are not the same:

It is a way of physical payment, which is quite distinct from UPI, according to Vishwas Patel, director of Infibeam Avenues Ltd. and head of the Payments Council of India. Digital money transactions are possible without using a bank. The value of the digital currency will be equal to the Indian Rupee, and your bank account will be charged for the amount that was spent.

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A two-tier model is being proposed for the introduction of retail digital currency. This indicates that the RBI will give the banks digital rupees to distribute, with the first phase beginning with four banks. This comprises IDFC First Bank, State Bank of India, ICICI Bank, and Yes Bank. These banks offer digital currency to their customers. Following that, you will be able to make digital wallet transactions from these banks with the help of your phone.

QR code can also be used to make payments:

A person can pay another person or a merchant using digital currency. In addition, paying using digital currency can be done by scanning a QR code.

Number of banks and cities to get the services at first: 

The Reserve Bank of India (RBI) announced that four additional banks, including Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank, will receive the ability to accept payments in the Digital Rupee in the second step. Mumbai, New Delhi, Bengaluru, and Bhubaneswar will be covered under the pilot program's initial phase, and Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla will be included later.