India uses e-rupee to settle 2.75 billion rupees of government bonds

The Reserve Bank of India’s central bank-backed digital rupee was used to settle secondary market transactions in Indian government bonds worth 2.75 billion Indian rupees ($33.29 million) as part of a pilot, data on Tuesday showed.

Trades in a total of three securities –– five-year 7.38 percent 2027 former benchmark 6.54 percent 2032 and the current benchmark 7.26 percent 2032 bonds –– were settled under the new route, data as of 4 p.m. IST (1030 GMT) showed.

"Since this was the first day, some deals only in liquid bonds were settled using CBDC," a trader with a state-run bank said.

The e-rupee would make the interbank market more efficient, the RBI said on Monday when it announced the pilot for CBDC in the wholesale segment.

"Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk," the RBI had said.

It plans to launch the e-rupee for the retail segment within a month. ($1 = 82.6230 Indian rupees)