A Bumpy Start For RBI's e-Rupee

With its wholesale and retail pilots being live, will the central bank be able to create a loyal user base?

learn more about Paromita Gupta

By Paromita Gupta • Dec 12, 2022 Originally published Dec 12, 2022

Entrepreneur India

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

First came barter, then gold and paper. Today is the world of Unified Payments Interface (UPI), so how will digital currency fare?

On Thursday, the Reserve Bank of India launched its first digital rupee (e₹-R) pilot for the country's retail segment in a closed user group. This comes a month after the launch of the central bank and regulatory body's pilot for wholesale digital rupee (e₹-W).

A digital rupee, or Central Bank Digital Currency, is referred to a digital substitute to the RBI-issued physical notes and coins. The pilot for retail digital rupee is underway in four cities with four banks currently. Whereas, about nine banks took part in the wholesale pilot and targeted inter-bank marketing.

"The launch of the e-rupee is a very positive step towards bringing resilience, efficiency, and innovation to the payments system. Along with reducing operational costs associated with physical cash management, it will also enhance settlement efficiency and spur innovation in cross-border payments and offer the public the same uses as any private virtual currency without the risks associated with it. We look forward to working with the RBI and our industry partners in driving forward the adoption of the Indian e-rupee in times to come" said Sandeep Ghosh, Group Country Manager India & South Asia, Visa. The central bank has reportedly created INR 1.71 crore of e-Rupee for its retail pilot.

However, the expected first response towards the retail-focused initiative was missing from the social media accounts of one of the biggest markets around the globe. A few users were seen sharing the QR codes for digital rupee used by merchants.

As per Reuters, a month into the wholesale pilot, bankers have shared that financial stakeholders have neither reaped nor seen any benefits of participating in the pilot.

"UPI had clear advantages and that is the reason why it became so popular. When you already have a smooth and an efficient form of digital transaction, the shift may not come naturally and in fact may even see less of a response (in consumer transactions) compared to wholesale CBDCs", a banker part of the pilot project told a British news agency.

Just a month and a day are not enough to make a fair judgment on the digital rupee. India is leading the world in real-time payments and became one of the few countries to launch its own CBDC. The nation's trajectory into the digital payments world has been something it is lauded for.

German Ambassador, Philipp Ackermann shared about how the world can learn from India to achieve its digitization goals.

With its own set of flaws and a vision to succeed, digital rupee should be given a chance to prove its mettle and find its own course. After all, Rome wasn't built in a day.

Paromita Gupta

Features Writer

Related Topics

News and Trends

Indian Startups Are Looking At Reverse Flipping: Economic Survey

The Survey said many Indian companies have been getting headquartered overseas, especially in destinations with favourable environments and taxation policies

News and Trends

Bversity Raises INR 1.5 Crore In Seed Funding

The fund raised will utilized to build team, build a user- friendly and trustworthy edtech platform with masterclass-style courses

Business News

'You're Going Way Back In Time': Bill Gates Gets Visibly Irritated When Pressed on Epstein

The billionaire sat down for an interview with ABC 7.30 in Australia where he was asked about his former dealings with the disgraced financier.

News and Trends

Google CEO Sundar Pichai Likely To Take Huge Pay Cut For Senior Executives

According to reports, Pichai didn't mention the percentage of salary that will be cut and for how long


7 Deductions You Can Claim Under the New Tax Regime

Though contributions made to PPF and Sukanya Samriddhi will not enjoy 80C tax benefits under the optional new tax regime, interest amount and maturity proceeds continue to be tax exempt