India’s Central Bank, RBI, is planning to improve the offline transfer capabilities of the Central Bank Digital Currency (CBDC). RBI Governor Shaktikanta Das revealed an increase in transactions among individual users of India’s digital rupee (CBDC) at the 2024 BIS Innovation Summit.

UPI Integration with CBDC for Individual Usage

Das stressed the need for broader adoption of the Unified Payments Interface (UPI). Leveraging the existing UPI infrastructure for CBDC transactions has seen up to 1 million transactions per day, predominantly among individual users. Efforts are ongoing to encourage more widespread usage.

The offline mode for CBDCs will provide a cash-like advantage by enabling transactions without internet access. CBDC will offer a similar level of anonymity to cash, with the potential for anonymizing transactions through legislation or technology.

Banks’ Role in Transactions to Remain

India’s digital rupee is not interest-bearing, unlike traditional bank deposits, to maintain the banking model. This non-interest feature preserves the mediation role of banks in CBDC transactions.

RBI is working on integrating the upcoming CBDC with fast payment systems, particularly UPI, to address individual user feedback. Simplifying the acceptance process for businesses, a single QR code will be compatible with both UPI and CBDC payments.

Growing Interest in Digital Rupee in India

As other countries exercise caution, India leads CBDC trials, expanding the use of digital currency, e-Rupi, through a pilot program initiated in December 2022. Over 1.3 million individuals and 300,000 businesses have participated, circulating over $1.2 million worth of rupees by March 2023.

While the majority of the circulated funds are in the wholesale segment (65%), individual adoption remains at 35%. India’s RBI is part of the 98% of central banks actively exploring CBDCs to enhance the functionality and accessibility of central bank money.