RBI Collaborates with Banks to Enhance Digital Currency Transactions

New Features Aim to Promote Adoption of India’s Central Bank Digital Currency (CBDC)

In an effort to bolster the adoption of the central bank digital currency (CBDC), often referred to as the e-rupee, the Reserve Bank of India (RBI) is collaborating with financial institutions to introduce a series of innovative features, according to sources familiar with the matter.

Despite an initial surge in interest, retail CBDC transactions in India have fallen short of the RBI’s ambitious target of one million transactions per day by the end of 2023. Currently, daily CBDC transactions average around 18,000.

Key Developments:

  1. Offline Transactions: Among the proposed enhancements is the capability for users to conduct digital rupee transactions even when offline. This feature aims to make CBDC usage more convenient and accessible.
  2. Integration with UPI: The RBI is also exploring the integration of the e-rupee with India’s widely used Unified Payments Interface (UPI). UPI is a real-time payments system that enables users to transfer funds across multiple banks without revealing their account details.
  3. Interoperability with UPI QR Codes: To promote seamless CBDC adoption, the RBI has been urging banks to make the e-rupee interoperable with UPI through QR codes. Several major banks, including the State Bank of India, have already activated this feature.
  4. Offline CBDC Transactions for Feature Phones: HDFC Bank, one of India’s leading private lenders, is collaborating with technology firm IDEMIA to develop a version of offline CBDC transactions specifically designed for feature phones, catering to a broader segment of the population.

While discussions are ongoing and technology proposals are under consideration, the RBI has not yet approved any of these features.

Industry Insights:

Sharat Chandra, co-founder of India Blockchain Forum, emphasized the need for incentivizing CBDC payments, stating, “Interoperability of UPI QR Code with digital rupee will remove friction… but this will not drive adoption unless CBDC payments are incentivized.”

Akhil Handa, a senior executive at Bank of Baroda, noted the potential for CBDC’s new use cases, such as offline transactions, to drive increased transaction volumes.


The collaborative efforts between the RBI and banks to introduce user-friendly features for the e-rupee aim to encourage wider adoption of digital currency transactions in India. As these enhancements are implemented and CBDC usage becomes more convenient, it is expected that retail CBDC transaction volumes will gradually rise.

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