eRupee can’t be turned into cash directly, for now

The central bank digital currency (CBDC), or the eRupee, cannot be converted currently into cash and vice versa. The RBIwill only issue eRupees against bank deposits and allow digital currency conversion into cash.

According to the central bank, the eRupee pilot project has progressed quite satisfactorily in a closed-user group and the number of users is gradually rising. Addressing an event at the Indian Merchants’ Chamber, Anuj Ranjan, chief general manager at RBI’s fintech department, said the central bank will bear costs relating to eRupee as it will be part of the RBI’s liabilities just like currency.

Ajay Rajan, country head for transaction banking at Yes Bank, said that the bank has already made the digital wallet available for download on the Apple App Store and Google Play Store. “The installation of the digital wallet can be done only by customers of the bank as we have restricted the app to SIM numbers that are registered with the bank. However, once it is installed, customers can add digital rupees to the wallet from any bank,” he said.

According to Rajan, while cash transactions are free, merchants do pay fees to cash-management companies for handling of notes. He said several companies have signed up for accepting payments in eRupees and these include oil marketing companies, Reliance Retail and Natural Ice Cream.