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?
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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.
India's own CBDC has been launched today for pilot
It might be the next revolution in payments like UPI?
What does it mean to you? ?
Here is all about the Indian CBDC ? https://t.co/epZR8EHLLN">pic.twitter.com/epZR8EHLLN
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.
We can learn a lot from India when it comes to digitisation. I'm here for 3.5 months and I'm amazed by the way digitisation has swept through the country. The way how people use smartphones in order to get through their life, we are way behind: German Ambassador Philipp Ackermann https://t.co/RylUhbkmpk">pic.twitter.com/RylUhbkmpk
— ANI (@ANI) https://twitter.com/ANI/status/1597977436674613248?ref_src=twsrc%5Etfw">November 30, 2022
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.
