Google Pay, Walmart-backed PhonePe, and Amazon are the top three payment platforms that are going to join the Indian Central Bank’s digital currency project by offering transactions via the e-rupee. Reserve Bank of India (RBI) started its digital currency pilot back in December 2022. At first, only the central bank was allowed to offer e-rupee through their mobile applications. Following RBI’s directive in April this year, other companies were also allowed to offer e-rupee transactions after its approval.
These fintech are working closely with the RBI, the National Payment Corporation of India (NPCI), and the domestic payment authority and are expected to launch access to the e-rupee over the next three to four months.
As per reports, digital currency transactions have declined sharply to 1-2 Lakh transactions a day from registering over 1 Mn transactions a day last year. Adding this another source told Reuters that the central bank has no immediate plans to do a full-scale launch of the digital currency.
The development came at a time when the banks are engaged with various fintech startups at various levels to deploy use cases for retail CBDCs. Two major use cases are being tested in the first phase of the CBDC retail pilot for NBPSOs. In which the first one includes subsidy payments for farm inputs, and the second use case is around corporate expense management. The banks are currently working to deploy and they will now work closely with the fintech startups to grow the CBDC pilot.
The CBCDs are a tokenized digital version of the Rupee that is issued by the RBI. It leverages distributed-ledger technology (DLT) and has been envisaged as a digital alternative to physical cash. In April, RBI deputy governor T Rabi Sankar said that 2.2 Cr transactions have been processed since the launch of the central bank digital currency (CBDC) pilot in December 2022.
Following this Sankar said that 46 Lakh users and 4 Lakh merchants were currently transacting in CBDC, and the transaction volumes were shifting from P2P (peer-to-peer) to P2M (peer-to-merchants) owing to the availability of more merchants that accept the Digital Rupee.
From its launch in 2022, the CBDC pilot is currently catering to the wholesale and retail segments with more and more banks making a beeline to join the trial run. In February 2024, the central bank announced additional functionalities such as offline capability and programmability for CBDC retail payments.
