Updated January 4th, 2024 at 16:52 IST
E-Rupee hits 1 million daily transactions in December, boosted by employee benefits: Report
The CBDC, e-rupee, was introduced as a digital counterpart to physical cash, leveraging distributed ledger technology.
Central Bank Digital Currency: Indian banks facilitated over 1 million transactions daily in December using the Reserve Bank of India's (RBI) central bank digital currency (CBDC), the e-Rupee. The surge was achieved with the help of disbursements related to employee benefits, marking a crucial milestone in the RBI's digital currency initiative, news agency Reuters reported quoting three sources.
The CBDC, e-rupee, was introduced as a digital counterpart to physical cash, leveraging distributed ledger technology. Although the e-rupee pilot commenced in December 2022, transaction volumes remained modest at 25,000 per day by the end of October. The scenario changed dramatically as large private and state-run lenders, including HDFC Bank, Kotak Mahindra Bank, Axis Bank, Canara Bank, and IDFC First Bank, opted to disburse employee benefits directly into CBDC wallets last month.
This strategic move not only supported the RBI in achieving its goal of 1 million daily transactions by the end of 2023 but also broadened the scope of e-Rupee use by integrating it with the popular United Payments Interface (UPI). The RBI anticipates that non-financial firms will follow suit, further amplifying the transaction volumes, according to one of the sources.
Moreover, the user base for e-Rupee has witnessed steady growth, reaching approximately 4 million users by the end of December, up from 3 million. The sources emphasised the potential for continued expansion as more sectors explore the benefits of CBDC transactions.
Despite being in the pilot stages globally, countries such as China, France, and Ghana are actively pursuing their CBDC projects. India's approach includes incentives for e-rupee transactions provided by banks, aligning with the RBI's encouragement to enhance transaction volumes.
Sharat Chandra, co-founder of India Blockchain Forum, praised the initiative, highlighting that compensating employees through CBDC is a positive step. He suggested exploring additional avenues, such as toll tax collections, to further incentivise the adoption of digital currency in the country.
(With Reuters inputs.)
Published January 4th, 2024 at 16:52 IST