The Reserve Bank of India on Tuesday said it will launch the pilot run for digital rupee on December 1.
The digital currency is an equivalent to the banknote but will be issued in electronic form.
Users will be able to make transactions with e-rupee through a digital wallet offered by the banks that are part of the pilot run and stored on mobile phones or devices, the Reserve Bank of India said.
The pilot will be launched in Mumbai, New Delhi, Bengaluru and Bhubaneswar and later in Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.
It will be rolled out in two phases with eight banks. The digital currency will be available with the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in the first phase. Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join in the second phase.
The e-rupee will be issued in the same denominations as paper currency and coins that are in circulation.
Transactions can be both person-to-person and person-to-merchant, the central bank said. An individual can pay the merchant by scanning the QR code available at the location.
The digital currency will not earn any interest and can be converted to other forms of money like bank deposits when needed.
“The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real time,” the Reserve Bank of India said.