India's central bank is set to launch a pilot for a wholesale central bank digital currency ("CBDC") on November 1 followed by a retail version within a month, it said Monday in a statement. The RBI named nine banks that will participate in the digital rupee project, including State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank (NYSE:HDB), ICICI Bank (NYSE:IBN), Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC (NYSE:HSBC).The pilot's use case for the wholesale CBDC will be the "settlement of secondary market transactions in government securities," in a move that would reduce transaction costs, the RBI said. The e-rupee launch for the retail segment is expected to take effect within a month in certain locations in closed groups comprising customers and merchants.The move comes as many central banks around the world explore CBDCs, a digital representation of a fiat currency that's backed by a central bank. Central banks in Iran and Thailand were some of the more recent ones that indicated plans for CBDC pilots. Last year, India's central bank governor said the RBI will start trials for a digital rupee.
