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The Reserve Bank of India (RBI) is preparing to connect the QR code of the upcoming Central Bank Digital Currency (CBDC) with the UPI payment system. The RBI Deputy Governor T Ravi Shankar mentioned that the central bank aims to increase the number of e-rupee users, which is the CBDC, to 1 million by the end of this month.
Pilot Test of Digital Rupee Initiated
Shankar also mentioned that the RBI plans to integrate the QR code of CBDC with the Unified Payments System (UPI). Last year, the Reserve Bank conducted a test to explore the use of digital rupee. The pilot test included wholesale and retail usage of CBDC.
Rise in Popularity of UPI
The Reserve Bank intends to leverage the UPI platform, which has gained popularity among people for payments, for the QR code of CBDC. However, Shankar clarified that the RBI has not set a specific timeline for the general use of CBDC and will gradually move in that direction.
Understanding Digital Rupee
Digital rupee refers to the electronic form of notes and coins. With the introduction of e-rupee, physical coins will no longer be required. The only difference is that transactions will be conducted online, digitally. Digital Rupee is built on blockchain technology.
Cities with Digital Rupee Availability
The RBI plans to make the digital rupee accessible through eight pilot project banks. The service will initially be offered in Bengaluru, Bhubaneswar, Mumbai, and New Delhi. The second phase would also give users access to the digital rupee in Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
