RBI Plans To Bring E-Rupee To UPI? India's CBDC Pilot Is Set To Receive Two Key New Features

The Reserve Bank of India (RBI) is doubling down on efforts to promote its digital currency, the e-rupee, working closely with lenders to launch two key new features, according to a fresh report.

What Happened? One standout feature on the anvil is the ability to transact offline, and another is integrating the e-rupee with the widely-used unified payments interface (UPI), according to sources close to Reuters.

For the uninitiated, UPI is a streamlined payment system that facilitates money transfers across banks without sharing account details. This push for interoperability between e-rupee and UPI will leverage the ubiquity of UPI QR codes, simplifying transactions.

Major players like the State Bank of India have already implemented this feature since its June announcement. However, Sharat Chandra of the India Blockchain Forum emphasised the need for incentivizing central bank digital currency (CBDC) payments, stating that ease alone might not guarantee widespread adoption.

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Another highlight involves facilitating e-rupee transactions when both customer and merchant are offline, a feature that’s under discussion. Notably, private lender HDFC Bank is reportedly collaborating with tech firm IDEMIA to develop an offline transaction mechanism, especially for basic feature phones.

Why it Matters? The RBI began its retail CBDC pilot in December 2022 in five cities: Mumbai, New Delhi, Bengaluru, Bhubaneswar, and Chandigarh. Currently, e-rupee transactions hover around 18,000 daily, a figure that pales in comparison to RBI’s ambitious target of a million transactions by 2023.

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Posted In: CryptocurrencyFintechMarketsCBDCe-RupeeRBI