RBI has started the pilot  #project for issuance and settlement of #digital  #currency (CBDC) in a closed group and environment.

let's understand what it is and how it is different from UPI digital payments.

For doing UPI transactions one needs a bank account and UPI ID. The transaction is done through a bank account in digital form. In case of CBDC or eR the transaction between two parties will not involve their bank account.

CBDC is simply digital form of physical or paper currency.

It will be issued in the same denomination as that of paper currency I.e 5,10,20 etc.

It will be a legal tender having sovereign backing and will bear RBI governor signature.

It can be kept in a mobile phone wallet which resembles your pocket wallet.

It will not leave audit trail of transactions between two parties except at RBI.

eR in Wallets will not earn interest as it is in your own wallet.


1. Saves printing cost.

2. One need not carry weight of cash in one's physical wallet.

3. eR in Wallets will be more safe as there will be no threat of pickpockets or theft. 

3. Bank's CASA deposit will be negatively affected.


1. Loss of privacy as transactions will be recorded at RBI.

2. It will need internet connectivity.

3. Cyber threats and security.

India is the first country to launch this concept.

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