Reliance Retail, India’s largest retail chain, will start accepting retail payments in digital rupee in a move that could supercharge the adoption of the country’s recently launched CBDC initiatives. Cryptocurrency in India is going through a process of legal identification. There is little surety if the country will legalize the digital currency considering that the digital rupee has started circulating in the market.
The retail CBDC will be mainly used for retail payments just like “cash”. It will be a digital rupee signifying legal tender in the form of digital token and issued in the same denominations as paper currency and coins and will be distributed through intermediaries, i.e., banks
Reliance Retail is part of the Indian conglomerate Reliance, said it has rolled out the support for CBDC at its gourmet store line Freshpik and will extend the feature across all its properties eventually. Thursday’s move makes Reliance the largest Indian firm to adopt the digital rupee.
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This historic initiative of pioneering the digital currency acceptance at our stores is in line with the company’s strategic vision of offering the power of choice to Indian consumers, said V Subramaniam, Director, Reliance Retail, in a statement. With more Indians willing to transact digitally, this initiative will help us provide yet another efficient and secure alternative payment method to customers at our stores.
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20% of the India’s budget is spent on interest expenditure while 34% of the budget is funded from borrowings. That means of every 1 Rupee borrowed, 59 paise go to interest payments on previous debt.
India’s central bank started to pilot the e?-R in December for retail markets across select Indian cities. Through e?-R, the Reserve Bank of India hopes to lower the economy’s reliance on cash, enable cheaper and smoother international settlements and protect people from the volatility of private cryptocurrencies. Based on the test results of the ongoing pilot, the central bank plans to experiment with additional features and applications of the digital rupee.
The Mukesh Ambani-led firm said it has partnered with ICICI Bank, Kotak Mahindra Bank and fintech Innoviti Technologies to launch the in-store support for digital rupee. Customers who wish to pay with the country’s CBDC (Central Bank Digital Currency), called e?-R, will be provided with a dynamic digital rupee acceptance QR code for scanning at the store.
India’s central bank has spent the last few years largely pushing to make its citizens avoid crypto trading. Despite a ruling from the country’s apex court, the central bank continues to force the hand of banks from engaging with crypto platforms in India, a move that has made on-ramp a nightmare for the firms involved, people with direct knowledge of the matter said.
Similarly, IDFC FIRST Bank has partnered with ToneTag, a global proximity and voice tech solution provider, to enable acceptance of digital rupee at merchant outlets. This follows a pilot launch of Central Bank Digital Currency (CBDC) for retail users by the Reserve Bank of India (RBI).
Madhivanan Balkrishnan, COO, IDFC FIRST Bank said;
This solution will change how merchants transact, and IDFC FIRST Bank is a proud partner in this collaboration. Digitization of cash payments is one more step in making transactions easier for our customers. As a bank that firmly believes in ‘Customer First’ approach this initiative aligns well with the same.
Kumar Abhishek, founder and CEO ToneTag said;
We are glad to collaborate with IDFC First Bank and participate in the first phase of CBDC retail pilot. In this pilot ToneTag will provide solutions through which merchants will be enabled to accept digital currency. With this launch India becomes one of the only few countries Globally to take this leap of digitalizing cash and reap its great potential to reduce counterparty credit and liquidity concerns, as well as increase the efficiency of payments and securities settlement. This indeed is going to be India’s decade and many kudos to RBI.