Recently, the RBI Governor highlighted the potential of the e-rupee to become anonymous, similar to paper currency, through the permanent deletion of transactions.

More on the news: 

  • The Reserve Bank of India (RBI) governor addressed concerns regarding the privacy aspect of CBDC, emphasizing the need to maintain the same level of anonymity as cash.

e-Rupee (e₹-R)

  • It is a central bank digital currency (CBDC) developed by the Reserve Bank of India (RBI). 
  • The e₹-R is a digital token representing legal tender, providing features akin to physical cash such as trust, safety, and settlement finality. 
  • Similar to cash, it does not earn interest and can be converted into other forms of currency, such as bank deposits. 
  • It would use blockchain technology for secure transactions. 
  • Unlike cryptocurrencies, it would be centrally issued and regulated by the RBI, offering the stability of the Rupee for digital transactions. 

Types of CBDCs:

  • Retail CBDCs: These are tailored for the general public to facilitate everyday transactions, resembling the use of cash in current contexts.
  • Wholesale CBDCs: Specifically crafted for financial institutions, these are utilized for interbank settlements and other wholesale 


  • CBDC is secure and convenient, but unlike cash, transactions leave a digital trail.
  • People worry that the government might track their spending with the e-Rupee.
  • RBI wants E-Rupee to be as anonymous as cash, where you don’t need to show your ID for every purchase.
  • RBI observes a preference for the Unified Payments Interface (UPI) among retail users.


  • One idea is to permanently delete e-rupee transaction records, similar to how cash purchases don’t leave a trace.
  • To increase CBDC adoption, RBI has enabled the Interoperability of CBDC with UPI for seamless integration.

RBI’s Approach:

  • The RBI, emphasizes technology-driven solutions to address privacy concerns associated with CBDC.
  • It aims to ensure CBDC transferability in offline mode, aligning with the accessibility feature of physical cash to enhance financial inclusion goals.
  • The RBI ensures CBDC distribution through banks and recently allowed the participation of non-banks in the pilot to widen its reach.
  • CBDC is made non-remunerative by making it non-interest bearing to mitigate risks of bank disintermediation.

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