E-Rupee CBDC Reaches RBI Target of 10 Lakh Daily Transactions

The banks of the country have given some employee benefits in December through digital rupees. This has made it easier for the Reserve Bank of India (RBI) to meet its target of 10 lakh transactions per day by the end of last year. Central Bank Digital Currency (CBDC) or e-Rupee has been created through distributed ledger technology as a digital alternative to cash.

The trial of e-rupee was started by RBI. However, after this it reached about 25,000 per day by October last year. Its use case was also expanded and it was linked to the widely used Unified Payment Interface (UPI). UPI provides the facility to send money through mobile apps. A source said that last month, some big government and private banks had transferred the amount related to employee benefit schemes to the CBDC wallets of employees. These included HDFC Bank, Kotak Mahindra Bank, Axis Bank, Canara Bank and IDFC First Bank. Due to this, transactions have increased rapidly.

RBI expects that some non-financial firms may also use this method. This will make it easier to increase transactions further. An executive having information about this said that the number of its users has increased from 30 lakh to 40 lakh in December. The digital rupee is likely to make the interbank market more efficient. RBI started this trial after considering the advantages and disadvantages of CBDC. Earlier, RBI had expressed opposition regarding cryptocurrencies. After demonetization in the country, there has been rapid growth in UPI payments. Digital rupee can also benefit from this.

CBDC is a payment solution based on blockchain, which is controlled by the Central Bank. It works like cryptocurrency but CBDC does not have the volatility and other risks that cryptocurrencies do. RBI did not respond to an emailed request for comment. CBDC projects are being trialled in countries like China, Ghana and France. Apart from this, Nigeria has started its own digital currency. However, it is under-used in Nigeria.