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RBI’s First Stage of Digital Rupee Implemented by Kotak Mahindra Bank

Published on February 03, 2023
Current context: Kotak Mahindra Bank Limited has started the first phase of the Central Bank Digital Currency (CBDC) project, which is known as "Digital Rupee" (e₹), a form of digital currency that is legally equivalent to paper money and coins.
RBI’s First Stage of Digital Rupee Implemented by Kotak Mahindra Bank
  • The Reserve Bank of India has selected KMBL as one of eight banks to participate in the pilot project for the issuance of e₹.
  • The first phase of the "Digital Rupee" (e₹) will be launched in Mumbai, Delhi, and Ahmedabad and will be accessible to a Closed User Group, including both retail customers and businesses.
  • The digital rupee wallet, which can be downloaded on Android smartphones, operates just like a physical wallet.
  • In November 2022, the RBI tested wholesale CBDC (e ₹-W) and later on December 1, 2022, launched a pilot project for the digital rupee in the retail segment (e ₹-R) with four banks in four cities.
  • Eight banks have been shortlisted to participate in the pilot project in phases, with four banks participating in the first phase and the other four banks, including KMBL, in subsequent phases.
  • The digital currency will be issued in the same denominations and distributed through financial intermediaries as part of the pilot project. Users can transact through a digital wallet offered by the participating banks.

Question:

Q.1 Which bank recently implemented RBI’s first stage of digital currency?
a. SBI
b. HDFC
c. Axis Bank
d. Kotak Mahindra Bank
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