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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.

Business Desk
Digital Rupee Transactions
Digital Rupee Transactions | Image:Freepik
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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.

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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.

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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.

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(With Reuters inputs.)


 

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Published January 4th, 2024 at 16:52 IST

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