eRupee CBDC Has Amassed 5 Million Users in Retail Pilot, Set for More Programmability: RBI Governor

India's digital Rupee, or eRupee central bank digital currency (CBDC), is presently in the advanced phases of its trials facilitated by 16 national banks. The eRupee has managed to amass five million users in its pilot stage, RBI Governor Shaktikanta Das claimed Monday. Das was speaking at a conference in Bengaluru when he said that the RBI was not looking to rush into deploying the CBDC across national financial systems and wishes to do so only upon thorough investigation.

The retail pilot of the CBDC launched in December 2022 with the aim of facilitating peer-to-peer transactions. At present, the eRupee is being tested for offline features and programmability functions, both of which are important features as per Das.

Elaborating on the same, the RBI governor said, that the programmability feature of the eRupee could serve as a key enabler for financial inclusion in India.

“Tenant farmers often find it difficult to access agricultural credit for inputs and raw materials as they do not have the land title to submit to the banks. However, programming the end use for purchase of agricultural inputs can give the required comfort to banks and thus establish the identity of a farmer not through his land holding but through the end use of funds being disbursed,” the RBI governor explained.

Through the programmability of the CBDC, he added, farmers will be eligible to obtain purpose-bound funds for the generation carbon credits. Other features that are in the pipeline for the eRupee include deploying a layer of anonymity for transactions and making the CBDC operational in offline ecosystems.

The 16-page transcription of Das' speech is being circulated among members of India's fintech community through networking platforms like LinkedIn.

While the RBI continues to maintain scrutiny on cryptocurrencies, it believes that the eRupee, which will have features like cryptocurrencies, is the future of payment systems for domestic and international transactions.

CBDCs are virtual representation of fiat currencies on blockchain networks. Transactions processed through CBDCs like India's eRupee, China's eCNY, and Nigeria's eNaira, will not only be recorded permanently, but will also keep the records unchangeable. This would bring more transparency to the financial systems and help central banks around the world reduce their dependencies on paper notes. Unlike cryptocurrencies, CBDCs are issued and monitored by central banks.

A Reuters report earlier this month said that UPI apps like Google Pay and PhonePe among others were looking to participate in India's CBDC trials under the RBI.

The RBI itself, in its recent report, said it was looking at the eRupee to become a tool to improve India's cross border transactions and take the INR to an international level.