Mumbai: The Reserve Bank of India (RBI) has significantly expanded its Central Bank Digital Currency (CBDC) pilot, bringing nine additional banks into the wholesale segment. The retail digital rupee (e₹-R) pilot also hit a milestone of over 1 million transactions.
"The response to the digital rupee has been encouraging. We are on track to achieve 1 million retail users by June." – RBI Deputy Governor.
Key developments
- Wholesale expansion: 9 new banks join SBI, ICICI, HDFC in wholesale CBDC pilot for secondary market transactions.
- Retail milestone: Over 1 million transactions recorded across 15 cities; 500,000+ active users.
- UPI interoperability: RBI announces that digital rupee wallets will be interoperable with UPI QR codes by Q3 2024.
- Offline functionality: Pilot for near-field communication (NFC) based offline transactions to begin in select rural areas.
Wholesale CBDC use cases
The wholesale digital rupee (e₹-W) is now used for settlement of secondary market transactions in government securities. The new banks include Axis Bank, Kotak Mahindra, Bank of Baroda, Canara Bank, and Punjab National Bank. This will deepen liquidity and efficiency in the bond market.
Retail adoption drivers
To accelerate retail uptake, RBI has allowed non-interest bearing digital rupee wallets to be linked to UPI apps. Several banks have launched cashback offers. The upcoming UPI interoperability will allow customers to scan any UPI QR code using their CBDC wallet.
Offline pilot in rural areas
A new offline functionality using NFC will be tested in parts of Meghalaya and Uttarakhand where internet connectivity is limited. This feature enables person-to-person transactions without data connectivity.
Global context
India's CBDC project is among the most advanced among major economies. Over 100 countries are exploring CBDCs, but India is one of the few with both wholesale and retail pilots. The RBI plans a calibrated rollout with focus on financial inclusion and monetary policy transmission.
