The landscape of India's digital currency pilot program is set to change with major players like Google Pay, PhonePe (backed by Walmart), and Amazon Pay expressing interest in joining the initiative. These companies, along with Indian fintech firms Cred and Mobikwik, have reportedly applied to participate in the pilot, offering transactions using the e-rupee, India's central bank digital currency (CBDC).
This development marks a significant shift in the pilot program, which initially only allowed banks to offer e-rupee transactions through their mobile applications. The Reserve Bank of India (RBI) opened the doors for participation by payment firms in April 2024. This move aims to broaden the user base and potentially revitalize the e-rupee initiative, which has seen a decline in transaction volumes since its launch in December 2022.
The inclusion of these popular payment platforms, which collectively handle over 85% of India's vast digital payments facilitated by the Unified Payments Interface (UPI), is expected to significantly boost e-rupee adoption. With millions of users already familiar with these platforms, integrating e-rupee transactions could create a seamless and familiar experience, potentially leading to increased usage.
While the initial enthusiasm for the e-rupee saw daily transactions exceeding 1 million late last year, those numbers have dropped considerably, currently hovering between 100,000 and 200,000 per day. This highlights the ongoing challenge for central banks worldwide in promoting digital currencies. However, the RBI's decision to include prominent payment firms suggests a strategic approach to address this issue.
Sources anticipate a rollout of e-rupee access through these platforms within the next three to four months, subject to RBI and National Payments Corporation of India (NPCI) approval. Despite ongoing efforts to popularize the e-rupee, the sources indicate that a full-scale launch is not on the immediate horizon. The pilot program is likely to continue for the next couple of years, allowing for further refinement and user adoption before a wider rollout.
The Reserve Bank of India's (RBI) digital currency pilot program, which began in December 2022, has garnered interest from major payment firms such as GooglePay, Walmart-backed PhonePe, and AmazonPay. Indian fintech companies Cred and Mobikwik have also expressed their desire to participate in the pilot. This expansion is part of an effort to boost the adoption of the e-rupee, a digital version of the Indian currency.
Despite an initial surge in transaction volumes, there has been a noticeable decline, with daily transactions dropping from over 1 million to approximately 100,000-200,000. The involvement of prominent payment firms is expected to broaden the user base and potentially increase transaction volumes.
Currently, the e-rupee remains in the pilot phase, with no immediate plans for a full-scale launch. The RBI and National Payments Corporation of India (NPCI) are working closely with these firms to integrate the digital currency into their platforms over the coming months. The e-rupee is anticipated to stay in the pilot stage for the next few years as the RBI continues to evaluate its performance and impact.
As major players in the digital payments space seek to join the pilot, the future of the e-rupee will likely hinge on the success of these integrations and the ongoing efforts to encourage broader adoption of digital currency in India.