The Aryavarth Express
Agency(Mumbai): The Reserve Bank of India (RBI) has announced a strategic expansion in the deployment of its central bank digital currency, the e-rupee, by allowing non-bank payment system operators to participate. This move aims to make the digital currency more accessible to retail users and is expected to significantly increase transaction volumes.
Launched initially in 2023, the e-rupee pilot was limited to banks. However, this restriction led to subdued transaction levels. To address this, the RBI now plans to permit third-party payment app providers such as PhonePe, Google Pay, and Paytm to offer the e-rupee through specially designed CBDC wallets.
“This will enhance access and expand choices available to users, apart from testing the resiliency of the CBDC platform to handle multi-channel transactions,” the RBI noted in its recent Statement on Developmental and Regulatory Policies.
The integration of the e-rupee with non-bank entities is still in preliminary stages, with these operators required to obtain RBI approval to host CBDC wallets. The enhancement of the e-rupee’s framework is part of a broader effort by the RBI to increase its adoption. Currently, approximately 4.6 million retail users and 400,000 merchants utilize the digital currency.
In an effort to further promote the e-rupee’s utility, the RBI has linked it with the Unified Payment Interface (UPI), India’s widespread real-time payment system, and introduced programmability features. These features enable directed cash transfers for specific purposes, such as agricultural subsidies, thereby broadening the potential applications of the e-rupee.
The RBI’s proactive approach has already shown positive results, with the introduction of employee benefits disbursements through the e-rupee in December contributing to the central bank achieving its goal of one million daily transactions by the end of 2023.