RBI Data Shows CBDC Wholesale Circulation Dropped, Retail Usage Sees Massive Jump: Report

RBI Data Indicates Decrease in CBDC Wholesale Distribution, Significant Increase in Retail Adoption: Study

RBI's eRupee CBDC Enters Advanced Trial Phase with Assistance from National Banks

The Reserve Bank of India's (RBI) eRupee, also known as central bank digital currency (CBDC), is currently undergoing advanced trials with support from several national banks. Recent data from the RBI indicates a surge in eRupee usage within the retail sector over the past year, while its usage in the wholesale sector has experienced a noticeable decline. The exact cause behind this trend remains unclear.

eRupee CBDC Usage Details Unveiled by RBI

According to a report by Economic Times referencing RBI data, as of FY 2024, eRupee worth approximately Rs. 234 crore has been utilized, marking a significant increase compared to Rs. 6 crore around the same period last year. In contrast, CBDC usage in the wholesale sector has decreased, with only Rs. 8 lakh utilized as of March, notably lower than the previous year's expenditure of Rs. 10.6 crore.

Central Bank Digital Currencies (CBDCs): Digital Representation of Fiat Currency on Blockchain Networks

A CBDC serves as a digital version of fiat currency, operating on blockchain networks rather than traditional servers. It shares several characteristics with cryptocurrencies, such as fast transaction speeds, improved privacy, and permanent transaction records. However, unlike cryptocurrencies, CBDCs are issued and overseen by central banks.

RBI's Plan to Expand Digital Rupee Circulation

In a recent announcement, the Reserve Bank of India (RBI) revealed its intention to introduce the digital rupee through payment system operators outside the banking system. Previously, CBDC distribution in India has been solely managed by banks. Going forward, the RBI is considering permitting platforms like Google Pay and PhonePe to facilitate digital rupee distribution within the retail sector.

UPI Payments Revolutionize Peer-to-Peer Transactions in India

Currently, Indians are utilizing the UPI payment method to conduct instant peer-to-peer transactions simply by scanning QR codes. The adoption of QR codes has eliminated the necessity for merchants and customers to exchange their contact information, emphasizing privacy.

Integration of eRupee CBDC with Existing QR Codes

Meanwhile, the central bank is in the process of ensuring compatibility between the eRupee CBDC and the existing QR code infrastructure in India. This initiative aims to streamline the usage of eRupee without requiring additional steps for CBDC access.