Digital Rupee to enable UPI payments: In an effort to revolutionize the Indian payments system, the Reserve Bank of India (RBI) is formulating a strategy to integrate the QR code functionality of the proposed Central Bank Digital Currency (CBDC) with the popular Unified Payments Interface (UPI) system.
Speaking to reporters recently, RBI Deputy Governor T Ravi Shankar announced that the central bank aims to expand the user base of e-rupee, also known as CBDC, to one million individuals by the end of this month.
Recognizing the Popularity of UPI
The Reserve Bank recognizes the wide popularity and adoption of the UPI platform for public payments. Consequently, it intends to leverage this platform by enabling the QR code feature for CBDC-linked transactions. Shankar, however, clarified that the RBI has not yet set a specific timeline for the general implementation of CBDCs and intends to proceed with caution.
Digital Rupee refers to the digital representation of physical currency notes and coins. With the introduction of e-rupee, people will no longer need physical coins or notes. Instead, the transactions will be done digitally through online channels. Digital Rupee works on blockchain technology, which ensures secure and transparent transactions.
Availability of Digital Rupee
The Reserve Bank of India is planning to launch a digital rupee through a pilot project involving eight banks. Initially the service will be available in Mumbai, New Delhi, Bengaluru and Bhubaneswar during the first phase. Thereafter, the digital rupee will be introduced in Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla in the second phase of the project.