The Reserve Bank of India (RBI) has begun testing a prototype wholesale central bank digital currency (CBDC) and will launch a pilot programme for a retail digital rupee with merchants and consumers in select locations “within a month”, the central bank says.

The wholesale digital rupee pilot will focus on the “settlement of secondary market transactions in government securities” prior to further tests with “other whole transactions and cross-border payments”.

Nine leading banks — State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC — are taking part in the pilot.

The RBI laid out its plans to build a prototype digital rupee earlier this month.

India to begin digital rupee payments pilot ‘within a month’ was written by Tom Phillips and published by NFCW.

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