RBI’s Digital Rupee Initiative
The Reserve Bank of India (RBI) is gearing up to enhance the functionalities of its digital rupee and pilot its application in international payments alongside global partners. This initiative signals a potential move towards the broader global acceptance of the digital currency.
This information was revealed in the RBI’s Annual Report for 2024-25, indicating that the forthcoming phase of development will leverage insights gained from prior pilot programs, as reported by CNBC TV18.
Development Timeline
The central bank began testing the wholesale version of the digital rupee in November 2022, followed by the launch of its retail version in December 2022. Although specific new applications remain under wraps, the RBI’s report mentions ongoing explorations into Central Bank Digital Currency (CBDC) pilots aimed at cross-border transactions on both bilateral and multilateral fronts.
Growth and Adoption Challenges
Notably, the circulation of the digital rupee surged by 334% year-on-year, escalating from ₹234.04 crore (around $28.1 million) in fiscal year 2024 to ₹1,016.46 crore (approximately $122.1 million) in fiscal year 2025. Despite this growth, the adoption rate for the e-rupee has been slow, with just one million retail transactions recorded by the end of June.
This milestone was only achieved after banks implemented incentives and partially used the digital currency for employee salaries. Previously, the RBI encouraged banks to ramp up daily transactions to a target of one million by the end of 2023 in order to assess the operational scalability of the currency. However, that momentum appears to have slowed, raising concerns about the viability of the digital currency initiative amid the discrepancy between incentivized adoption rates and genuine user engagement.
