Question
What is the interest rate earned on digital currency
e-rupee?Solution
Digital currency e-rupee or Central Bank Digital Currency (CBDC) is a digital form of currency notesissued by a central bank. Reserve Bank broadly defines CBDC as the legal tenderissued by a central bank in a digital formshall be accepted as a medium of paymentand a safe store of value. The Reserve Bank announced the launch of the first pilot for retail digital Rupee(eā¹-R)on December 01, 2022. Theeā¹-R offers features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks.
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