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

By Dharamraj Dhutia

MUMBAI (Reuters) – 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% 2027 former benchmark 6.54% 2032 and the current benchmark 7.26% 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.

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“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)

(Reporting by Dharamraj Lalit Dhutia)

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