(Nov 1): India’s central bank started a pilot program of its digital currency Tuesday, allowing select banks to use it for settling secondary-market transactions in government securities. 

Banks traded 2.75 billion rupees (US$33.3 million) of bonds on the first day using the new form of currency, data from Clearing Corp. of India Ltd showed. Nine participating banks executed 24 trades worth 1.4 billion rupees in 7.38% 2027 bond, 23 trades totaling 1.3 billion rupees in 7.26% 2032 bonds and one transaction in 6.54% 2032 bond. 

The e-rupee will be tested for retail use within a month in some locations, the Reserve Bank of India said on Monday. The launch comes as India steps up its fight against private digital currencies. Officials announced a new tax regime this year that decimated volumes on crypto exchanges. 

The limited roll-out comes a day after Singapore’s monetary authority unveiled trials of a digital version of its local dollar. The central banks of China, the euro area, the Bahamas and others have been experimenting in the field. Many others are examining ways to quell the threat to financial stability from private digital currencies. 

Central bank digital currencies “will provide the users the same experience of dealing in currency in digital form, without any risks associated with private cryptocurrencies,” the RBI said earlier in a concept note. These currencies will also ensure consumer protection “by avoiding the damaging social and economic consequences of private virtual currencies.”

Banks involved in the pilot are the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank Ltd., Kotak Mahindra Bank, Yes Bank, IDFC First Bank and the Indian unit of HSBC Holdings Plc.