The Reserve Bank of India (RBI) aims to reach 1 million daily transactions by December for the CBDC (eRupee) being trialled in India. In order to accelerate the number of CBDC transactions, the Reserve Bank of India (RBI) has reportedly given banks a target to facilitate a minimum number of eRupee transactions. India has been working on its CBDC plan for at least two years. Last year, my country’s first national digital currency entered the pilot stage.
Indian banks reportedly insist that eRupee CBDC has limited use cases as the country’s widely used UPI system already facilitates online payments digitally. However, following the instructions of the Reserve Bank of India, banks will now do their part to ensure eRupee traction for select users to handle daily purchases, Report the Mint declared on Monday.
Currently, several large state-owned and private banks, including State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Yes Bank, are participating in the ongoing CBDC trials with the Reserve Bank of India.
Once banks reach designated targets, they will be responsible for receiving government-approved incentives.
Gadgets 360 has contacted RBI for details of the development.
CBDCs function similarly to cryptocurrencies, but they are regulated and issued by a central bank. Digital currencies not only make online payment systems smoother but also reduce dependence on cash banknotes.
As part of ongoing trials, eRupee CBDC is being loaded with functionality to interact with existing UPI QR codes in India. This will allow its test users to process payments through this digital currency by simply scanning a QR code that is already in use.
T Rabi Sankar, deputy governor of the Reserve Bank of India, said earlier this month that as of June 2023, CBDC transactions were processed by 1.3 million customers and 300,000 merchants.
The Bank for International Settlements (BIS) found in a survey earlier this year that nearly two dozen central banks in emerging and advanced economies are expected to have digital currencies in circulation by the end of the decade.
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