How to use e-Rupee | Digital Rupee App Tutorial | CBDC

Summary

In this video, the host explores India's official digital currency, e-Rupee, explaining its features, uses, and differences from traditional payment systems like UPI and wallets. e-Rupee, issued by the RBI, is a centralised, sovereign-backed digital currency that functions like cash but with added benefits such as reduced transaction costs and easier cross-border payments. The video dives into practical experiments, demonstrating how the digital currency works, including adding, sending, and tracking transactions. It also highlights the potential of e-Rupee in bringing financial inclusion to those without bank accounts and reducing cash management costs.

Takeaways

• 😀 e-Rupee is India's official digital currency, backed by the RBI, and it functions as a legal tender similar to physical cash.
• 😀 e-Rupee is a centralized digital currency, unlike Bitcoin which is decentralized and uses a public blockchain.
• 😀 The e-Rupee is a Central Bank Digital Currency (CBDC), and transactions are controlled by the RBI, making it more secure and traceable.
• 😀 Unlike cryptocurrencies like Bitcoin, e-Rupee does not fluctuate in value and does not require tax payment based on price changes.
• 😀 The digital currency operates through apps provided by banks, with the user interface largely standardized across different bank apps.
• 😀 To use e-Rupee, users need to download a digital currency app, register with their bank, and set up a wallet with a 6-digit pin.
• 😀 e-Rupee can be used for peer-to-peer transactions, and the sender and receiver can track the serial number of the digital notes.
• 😀 The e-Rupee wallet displays denominations similar to physical currency, including notes and coins in the same values.
• 😀 A key advantage of e-Rupee is that it can be used by individuals without a bank account, offering financial inclusion to the unbanked.
• 😀 e-Rupee transactions offer lower energy consumption for verification compared to traditional payment methods, promoting sustainability.
• 😀 e-Rupee offers enhanced security features, such as preventing screenshots and screen recording while performing transactions.

Q & A

What is e-Rupee and how is it different from other digital currencies like Bitcoin?

e-Rupee is India's official digital currency, backed by the Reserve Bank of India (RBI), and it operates as a centralized digital currency using a private blockchain. Unlike Bitcoin, which is decentralized and operates on a public blockchain, e-Rupee is centrally controlled by RBI, and its value is legally backed by the government. Additionally, e-Rupee is considered legal tender in India, unlike Bitcoin or other cryptocurrencies.

What are the main advantages of e-Rupee?

e-Rupee offers several advantages: it reduces the cost of printing physical currency, minimizes transaction verification costs, ensures easier cross-border transactions, provides enhanced anonymity for low-value transactions, and enables individuals without bank accounts to participate in the digital economy.

How is e-Rupee different from UPI or wallets?

e-Rupee differs from UPI and wallets because it operates as a legal tender issued by the RBI, similar to cash, whereas UPI and wallet transactions are bank-mediated and are linked to an individual's bank account. Additionally, e-Rupee can be used without the need for a bank account, while UPI and wallets require one.

Can the Reserve Bank of India track e-Rupee transactions?

Yes, the RBI can track e-Rupee transactions. Although lower-value transactions maintain some level of anonymity, the RBI has the capability to monitor and trace all digital currency movements through its blockchain system, unlike cash transactions which are completely anonymous.

What is the role of banks in the e-Rupee ecosystem?

Banks play an essential role in the e-Rupee ecosystem by facilitating the distribution and management of e-Rupee tokens. Citizens need to have a bank account to load or withdraw e-Rupee, and banks ensure the integrity and conversion of digital currency into physical currency, if required.

How can I use e-Rupee for transactions?

To use e-Rupee, you need to download a digital currency app, which is available from several banks. After registering and verifying your account, you can load e-Rupee onto your wallet, send or receive payments, and use it for transactions directly with individuals or businesses.

What is the process of transferring e-Rupee to another person?

To transfer e-Rupee, you can either scan a QR code or send it using a contact number. The recipient must have a compatible digital wallet for receiving the currency. You can send the e-Rupee directly from your wallet after selecting the amount and verifying the transaction with a PIN.

What happens if I send a Rs 5 e-Rupee note when I only have Rs 4 in my wallet?

In such a case, the Rs 5 e-Rupee note will be sent to your bank, and the bank will provide the recipient the equivalent of Rs 4 from your balance. The remaining Rs 1 will be sent back to your wallet as change.

Is e-Rupee linked to the existing UPI payment system?

Currently, e-Rupee is not directly linked to UPI, meaning you cannot use your e-Rupee wallet to pay via UPI QR codes or apps like Google Pay or PayTM. However, the government plans to integrate e-Rupee with UPI in the future, allowing for easier transactions between the two systems.

Can the e-Rupee app be used by anyone, even without a bank account?

Although the e-Rupee app is available through banks, it is designed to be accessible for anyone. However, currently, some apps may restrict use to only account holders of specific banks, though RBI's vision suggests that anyone should eventually be able to use the e-Rupee, even without a bank account.