India’s CBDC platform hits 5m users 20 months after pilot launch

Reserve Bank of India Governor Shaktikanta Das said caution should be exercised in CBDC deployment as the retail pilot has now reached over 5 million users.

The Reserve Bank of India’s digital currency platform has crossed the 5 million user mark as the country continues to cautiously expand its digital currency pilot programme, Business Standard reported.

Speaking at a conference in Bengaluru on Monday (August 26), Reserve Bank of India Governor Shaktikanta Das stressed the need for a measured approach to the full-scale deployment of the country’s CBDC (also known as e-rupee), stressing the importance of understanding its impact on users, monetary policy and the broader financial system. Das stressed that comprehensive insights from pilot data are vital before moving to wider implementation.

“The real introduction of CBDC can be gradually phased in. Without a doubt, CBDC has the potential to form the basis of future payment systems for both domestic payments and cross-border payments.”

Shaktikanta Das, Governor, Reserve Bank of India

Launched in December 2022, RBI’s CBDC pilot covers both retail and wholesale segments. The pilot, which currently involves 16 participating banks, has gone beyond the initial payment use cases and tested offline and programmability functions. Das said that the programmability feature could play a significant role, adding that it could serve as a “key enabler for financial inclusion by ensuring funds are delivered to the intended user.”

Adoption of the e-rupee has been slow, with the Reserve Bank of India reporting 1 million retail transactions by the end of June, a milestone that was reached only after local banks offered incentives and employees were paid a portion of their salaries using the government-issued digital currency.

The RBI had earlier urged banks to increase transactions to at least 1 million per day by the end of 2023 to test the scalability of the system. However, that push has since ended, casting doubt on the future of the digital currency initiative due to the gap between incentivised metrics and actual user adoption.