The Reserve Bank of India (RBI) wants to boost its daily central bank digital currency (CBDC) transactions using the country’s existing Universal Payment Interface (UPI) infrastructure, according to Deputy Governor T Rabi Sankar. UPI is India’s fast payment system, which combines instant settlements with retail point-of-sale QR codes for vendors. The link will enable the digital rupee to be used more easily at merchant outlets according to the Times of India.
Since launching its e-rupee retail pilot in December 2022, India’s central bank has been looking for ways to increase adoption among its citizens. So far, 1.3 million users have downloaded the CBDC digital wallet, but daily transactions have only recently reached 10,000, partly due to the limited number of merchants accepting digital rupee payments. It was reported that there are 300,000 merchant outlets that accept the digital rupee, but in January there were just 5,000.
RBI deputy governor, T Rabi Sankar, now wants to increase the daily transaction number to around 1 million by the end of the year by integrating with India’s domestic UPI infrastructure. The target seems achievable, considering daily UPI transactions currently stand at over 300 million. However, the fast payment system could also stand in the way of increased user adoption in the same way that WeChat Pay and AliPay have in China. Many people see retail CBDCs as competing with, rather than complementing, existing payment systems.
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