The Reserve Bank of India (RBI) is aiming to clock one million transactions in India’s under-trial CBDC, the eRupee, daily by December. In order to accelerate number of CBDC transactions, the RBI is reportedly giving targets to banks to facilitate a minimum number of transactions in the form of the eRupee. India has been working on its CBDC initiative for at least two years now. Last year, the country’s first ever national digital currency was launched into its pilot mode for trials.
Indian banks have reportedly maintained the opinion that the eRupee CBDC could have only limited use cases because online payments are already facilitated digitally by the widely used UPI system in the country. Under RBI’s directions, however, banks will now do their bit to ensure that select users get to process eRupee tractions for daily purchases, a report by the Mint claimed on Monday.
At present, multiple large state-owned and private lenders, including State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Yes Bank, are participating with the RBI in the ongoing CBDC trials.
Once the banks meet their assigned targets, they would be liable for rewards approved by the government.
Gadgets 360 has reached out to the RBI for details on the development.
CBDCs function like cryptocurrencies, but they are regularised and issued by the central banks. Digital currencies not only smoothen online payment systems, but also reduces the dependency on cash notes.
As part of its ongoing trials, the eRupee CBDC is being loaded with the capability to interact with existing UPI QR codes in India. This would allow its test users to process payments via this digital currency by simply scanning already in-use QR codes.
CBDC transactions were processed by 1.3 million customers and 0.3 million merchants as of June 2023, RBI deputy governor T Rabi Sankar had said earlier this month.
Nearly two dozen central banks across emerging and advanced economies are expected to have digital currencies in circulation by the end of the decade, the Bank for International Settlements (BIS) had found in a survey earlier this year.