India’s Reserve Bank (RBI) is gearing up to enhance the offline transfer capabilities of its Central Bank Digital Currency (CBDC). According to The Economic Times, RBI Governor Shaktikanta Das revealed that there has been a surge in transactions among individual users of India’s digital rupee (CBDC) at the 2024 BIS Innovation Summit.
Integrating UPI with CBDC for Individual Use
Das emphasized the need for wider adoption of the Unified Payments Interface (UPI), stating, “We have utilized the existing trade infrastructure on UPI to facilitate CBDC transactions. Despite reaching a daily transaction volume of 1 million, UPI remains the preferred choice among individual users. However, we hope this will change in the future.”
The offline mode for CBDCs will replicate the significant advantage of cash by enabling transactions even without internet access. Das also confirmed that CBDC will provide a level of anonymity similar to cash, saying, “Anonymity can be addressed through legislation or technology, such as permanently deleting transactions. This could be one of the methods employed. The core principle is to ensure that CBDC is as anonymous as cash, nothing more, nothing less.”
Banks’ Mediation to Continue
Das also highlighted that India’s digital rupee is designed not to offer interest, unlike traditional bank deposits, in order to preserve the banks’ business models. This feature minimizes the risk of eliminating banks from the mediation process.
RBI is actively working to integrate the forthcoming CBDC with fast payment systems, particularly UPI, in response to feedback from individual users. One of the measures taken by the bank is to enable a single QR code that can be used for both UPI and CBDC payments, simplifying the acceptance process for businesses.
Digital Rupee Gains Traction in India
While developed countries display a more cautious approach, India stands out as one of the few pioneering nations in CBDC trials. The country is expanding the usage of its digital currency, e-Rupi, through a pilot program launched in December 2022. To date, over 1.3 million individuals and 300,000 businesses have participated in this program.
As of March 2023, over $1.2 million worth of rupees have been circulated. However, the majority of this amount (65%) is currently utilized in the wholesale segment, with individual adoption rates at 35%.
India’s RBI is among the vast majority (98%) of central banks worldwide actively researching CBDCs. These studies aim to enhance the functionality and accessibility of central bank money.
You can stay updated with our news on Telegram, Facebook, Twitter & Coinmarketcap.
Disclaimer: The information provided in this article does not constitute investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry risks, and should conduct their own research.
