India’s Digital Rupee Gains Momentum: RBI Targets 1 Million Daily Transactions by Year-End

In a significant update, Reserve Bank of India (RBI) Governor Shaktikanta Das announced this Wednesday at the Global Fintech Fest in Mumbai that the digital rupee pilot program has amassed about 1.5 million users. Additionally, over 300,000 merchants nationwide are now accepting this form of digital currency. The pilot is operational through 13 banks and spans 26 cities.

India’s Central Bank Digital Currency (CBDC) journey started with a wholesale segment trial in November last year. Consequently, a pilot for the retail segment was rolled out in December. Das disclosed that the digital rupee trials have expanded to approximately 1.46 million users as of August 31. Moreover, the RBI aims for 1 million daily CBDC transactions by December, which would furnish ample data for comprehensive analysis.

The RBI has made significant strides since February when Deputy Governor T. Rabi Sankar reported only 50,000 users and 5,000 merchants were involved. By July, those figures swelled to 1.3 million users and 300,000 merchants. Hence, the growth curve shows a steep rise in acceptance and utility.

Additionally, full interoperability of the digital rupee with UPI QR codes has been enabled, ensuring seamless transactions and adding another layer of convenience for users. The RBI is also setting its sights beyond retail transactions. Ajay Kumar Choudhary, RBI’s Executive Director, stated this Sunday on the fringes of the G20 Leaders’ Summit that a CBDC pilot for interbank borrowing or the call money market could be launched as early as next month. It’s noteworthy that India holds the G20 Presidency this year.

Indian officials believe the digital rupee could be a solid rival for cryptocurrencies. Choudhary stated back in March that India’s CBDC will act as an alternative to cryptocurrency, echoing a sentiment expressed by Sankar last December. Sankar argued that the digital rupee should offer all cryptocurrency capabilities without associated risks.

In summary, the digital rupee is shaping to be a game-changer in India’s financial landscape. With an increasing number of users and merchants, interoperability features, and lofty transaction targets, it’s evident that the RBI is betting big on its digital currency venture.

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