RAS question
Which of the following is correct about the RBI's e₹ (CBDC) pilot?
Correct answer: (C) Both wholesale (e₹-W) and retail (e₹-R) pilots have been launched.
RBI launched CBDC pilots in both segments: Digital Rupee-Wholesale (e₹-W) on 1 November 2022 and Digital Rupee-Retail (e₹-R) on 1 December 2022.
Explanation
RBI’s e₹ pilot was not limited to one segment. The wholesale pilot, called Digital Rupee-Wholesale (e₹-W), began on 1 November 2022, with its use case limited to settlement of secondary market transactions in government securities. The retail pilot, called Digital Rupee-Retail (e₹-R), began on 1 December 2022 within a closed user group of participating customers and merchants. e₹-R is a digital token representing legal tender, distributed through banks, and usable through bank digital wallets for Person-to-Person and Person-to-Merchant transactions. Therefore, the accurate statement is that both wholesale and retail CBDC pilots had been launched.
Why the other options are wrong
- (A) This overstates the technology comparison: the retail pilot has components based on blockchain technology, but RBI’s CBDC is a central bank digital rupee, not Bitcoin-like private cryptocurrency.
- (B) CBDC was a separate RBI pilot for specific wholesale and retail use cases, not a complete replacement for UPI.
- (D) This ignores the retail pilot, which RBI launched on 1 December 2022 after the wholesale pilot began on 1 November 2022.
Concept
This tests the Indian Economy syllabus area on central banking, digital currency and payment systems. It recurs in RAS because RBI initiatives are often tested through launch sequence, institutional design and use-case distinctions.