RAS question
What is the Digital Rupee (e₹) launched by RBI?
Correct answer: (C) A Central Bank Digital Currency (CBDC) issued by RBI.
The Digital Rupee, or e₹, is India's Central Bank Digital Currency issued by the Reserve Bank of India in digital form.
Explanation
The Digital Rupee, or e₹, is not a fresh paper-note denomination or a private crypto token; it is India's CBDC issued by the Reserve Bank of India. RBI describes it as the digital form of India's physical currency, the rupee, at par with physical currency and backed by RBI's guarantee and settlement finality. The wholesale pilot, e₹-W, began on 1 November 2022, followed by the retail pilot, e₹-R, on 1 December 2022. RBI's FAQ also states that e₹, as a digital form of the rupee bank note, is legal tender and a liability of the Reserve Bank of India.
Why the other options are wrong
- (A) A physical denomination would be another paper note, whereas e₹ is issued in digital form as the rupee's CBDC.
- (B) Bitcoin is a private cryptocurrency, while e₹ is sovereign currency issued by RBI and recognised as legal tender.
- (D) SBI may offer an e₹ wallet, but the Digital Rupee itself is issued by RBI, not operated as an SBI-only mobile wallet.
Concept
The Indian Economy syllabus covers money, banking, RBI functions and digital payments. CBDC sits at the intersection of currency issuance, legal tender and financial technology in RAS preparation.