RBI Proposes Support for CBDC Distribution via Non-Bank Payment Operators

Non banking payment operators could soon support sending and receiving the RBI's CBDC, or digital rupee.

Written by Radhika Parashar, Edited by David Delima | Updated: 5 April 2024 19:51 IST

RBI Proposes Support for CBDC Distribution via Non-Bank Payment Operators

The RBI kickstarted the digital rupee trials back in December 2022

Highlights

RBI wishes to expand the use cases of India’s CBDC
The cenbank plans to facilitate CBDC payments via existing QR codes
The RBI is adding features for offline payments to the CBDC

Several countries, including India, are expanding central bank digital currency (CBDC) trials, hoping to integrate then with their existing financial systems. The Reserve Bank of India has proposed the expansion of support for the digital rupee CBDC within the retail ecosystem beyond banks. In the coming days, the RBI is expected to start circulating the digital rupee through payment system operators who are not part of the banking system. The detail was disclosed on Friday in a statement by RBI Chief General Manager Yogesh Dayal.

Until now, India's CBDC distribution was being conducted by banks that are part of its trials. Moving forward, however, RBI is likely to allow platforms like Google Pay and PhonePe also to distribute the digital rupee in the retail ecosystem.

“CBDC pilots in the retail and wholesale segments are underway with more use-cases and more participating banks. Continuing with this approach, it is proposed to make CBDC-retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets,” Dayal said in a prepared statement issued by the RBI.

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CBDCs are a virtual representation of the fiat currency of a country. Built on blockchain networks, they work like cryptocurrencies but are issued by a central bank. Through CBDCs, people can process quick payments of hefty amounts and all the transaction history will be stored in a permanent, unchangeable format.

“This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions. Necessary changes will be made to the system to facilitate this,” the official said in the statement.

Since December 2022, the RBI has clocked an impressive feat in conducting research and development around the digital rupee. The CBDC is currently in an advanced trial phase in India.

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In February this year, the RBI had spoken about its plans to experiment with offline solutions to drive the adoption of CBDC in those parts of India that are not as well connected to the Internet as developed cities.

In 2023, the State Bank of India introduced UPI interoperability with the digital rupee. Canara Bank also rolled out a similar offering.

“As per the data published in the balance sheet of the Reserve Bank of India as on March 31, 2023, the e-Rupee issued for CBDC (Retail) at Rs 5.70 crore,” the RBI had stated in February while answering an RTI appeal.

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Further reading: Cryptocurrency, CBDC, Digital Rupee, RBI

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More