The Reserve Bank of India (RBI) has achieved its target of 1 million daily transactions for its digital rupee by the end of 2023, driven by the distribution of employee benefits through digital rupee in December. Sources close to the matter revealed this information to Reuters.
The RBI initiated its e-rupee pilot in December 2022, with transactions averaging 25,000 per day by the end of October. However, its use case expanded significantly when it was linked to the popular United Payments Interface (UPI), a framework facilitating peer-to-peer money transfers via mobile apps. The central bank’s digital currency, e-rupee, serves as a digital alternative to physical cash and was developed using distributed ledger technology.
Some banks, including HDFC Bank, IDFC First Bank, Kotak Mahindra Bank, and IDBI Bank, disbursed amounts related to employee benefit schemes directly to employees’ CBDC wallets instead of their salary accounts, according to one of the sources. The RBI expects non-financial firms to follow suit, further boosting transactions.
The user base for e-rupee has also been steadily growing, reaching about 4 million users currently, up from 3 million in December. To encourage e-rupee transactions, banks are offering incentives following the RBI’s encouragement.
In November last year, the RBI was reportedly in talks with the US, Hong Kong, and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) to discuss fast and cost-effective cross-border transactions through digital currencies.
Additionally, the RBI was planning the introduction of its wholesale central bank digital currency (CBDC) in the call money market. This move would enable the use of digital currencies for interbank borrowing or call money market transactions.
Outside of the banking sector, Reliance has ventured into the retail space by accepting transactions through digital currencies.
