State Bank of India (SBI), the country's largest bank, introduced an initiative to enable seamless digital rupee transactions through UPI, enhancing the adoption of digital currency. This initiative connects UPI with Central Bank Digital Currency (CBDC), aligning with the Reserve Bank of India's e-rupee project. Users can access this service via the SBI eRupee app, facilitating payments using digital rupees through UPI QR codes at various outlets.
CBDC explained:
CBDC, or Central Bank Digital Currency, is based on blockchain technology like cryptocurrencies but differs significantly. It carries the same sovereign guarantee as traditional paper currencies, ensuring security and stability.
Benefits for users:
SBI's initiative aims to provide convenience and accessibility to users, promoting digital currency utilization. By integrating CBDC with UPI, the bank anticipates increased digital currency usage in everyday transactions, potentially transforming the digital currency ecosystem.
The path to CBDC implementation:
The Finance Minister, Nirmala Sitharaman, announced CBDC in the General Budget 2022-23, followed by the Reserve Bank of India's CBDC testing initiation on December 1, 2022. With SBI's participation, CBDC has now gained the support of a major bank with a vast customer base, extensive branch network, and reach in remote areas.
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