- Date : 07/02/2023
- Read: 2 mins
RBI's pilot to enable merchants to accept the digital currency.
IDFC First Bank and ToneTag are partnering to accept Digital Rupee at Merchant Outlets. ToneTag is a voice tech and global proximity solution provider. The partnership results from the RBI (Reserve Bank of India) pilot program. We recently saw RBI announce the Central Bank Digital Currency (CBDC) launch for retail. The move is the first step towards CBDC use. It is going forward with four banks, and IDFC First Bank is among them.
Also Read: What does the RBI have to say about the digital rupee?
About CBDC
Participating banks will offer digital wallets, and users can transact through them. The issued currency will be in the same denominations and distributed with financial intermediaries' help. Digital Rupee has features like physical cash settlement finality, safety, and trust. There will not be any interest on CBDC, and it can convert into other money forms, such as bank deposits.
Expert Talk
IDFC First Bank COO Madhivanan Balkrishnan said that the initiative would change transactions and the solution would change merchant transactions. He said that IDFC First Bank is this collaboration's proud partner. He added that digitization of cash payments would make it easier for IDFC First Bank customers, and it firmly believes in a customer-first approach. His statement included that users can transact with the digital rupee through a wallet (digital) offering by the four banks. It will be stored on hardware wallets or mobile phones to help P2P (person-to-person) and P2M (person-to-merchant) transactions. The digital rupee will offer functionalities of physical cash, such as settlement finality, trust, and safety. He added that there would not be any interest on CBDC, and it can convert into other money forms, such as bank deposits.
Also Read: All you need to know about CBDC.
CEO and Founder of ToneTag, Kumar Abhishek, said they are happy to team up with IDFC First Bank and participate in this retail pilot for CBDC. ToneTag hopes to provide solutions to merchants to accept the digital currency. India is among the first few countries worldwide to take steps towards currency digitization, and it has great potential to reduce liquidity problems and counterpart credit. He also believes that the payments will become efficient, and so will securities settlements. He believes it is India's decade and congratulated the RBI for the move.
