Context:
CRED & MobiKwik have created the e Rupee wallets in partnership with Yes Bank, marking the first scale expansion backed by fintech in the pilot of the CBDC of the Reserve Bank of India. This entry is expected to further digital currency acceptance, simplify transactions, and reduce cash dependency.
Key Highlights:
- Limits to Transactions, at Present
- ₹10,000 per transaction.
- ₹50,000 a day.
- Cash in up to ₹1 lakh: Only stored if the amount in notes is equal to ₹500 and lower denominations.
What is Central Bank Digital Currency?
Fintech vs. Bank-Backed CBDC Wallets: What’s the Difference?
| Feature | Bank-Backed Wallets | Fintech-Backed Wallets |
|---|---|---|
| Control & Oversight | Managed directly by banks | Offered by fintechs with sponsor banks |
| User Experience | Traditional banking interfaces | Agile, feature-rich fintech apps |
| Regulatory Compliance | Direct RBI oversight | Compliance via partner banks |
| Adoption Potential | Limited to bank customers | Broader reach via fintech user base |
Key difference: While UPI enables real time bank transfers, the e rupee is a sovereign digital currency issued directly by the RBI.
Current Adoption & Fintech Innovations
- 5 million customers and 420,000 merchants have been CBS pilot participants as of June 2024.
- CRED: Beta launches allow P2P transfer & UPI linked transactions.
- Future updates to enable programmable merchant payments, CREDPay integration, and PIN less transactions for amounts under ₹500.
- MobiKwik: Full rollout for P2P and P2M transactions in tow.
Future of E Rupee: What Lies Ahead?
- The finance tech world
- Smart contracts & money programmed: Automated refunds, cashback tracking, and purposeful restrictions for payments.
- The machinery for revolutionizing merchant payments
- CREDPay & PIN less Payments enabling frictionless business transactions.
- Financial Inclusion & Mass Adoption
- Working toward a realm where CBDC transcends constraints of conventional digital wallets, where cashless transactions become smooth and accessible.
Challenges & Opportunities
- Fintech firms drive adoption through superior UX, consumer education, and innovative B2C scaling.
- Cost effectiveness will be the key, both fintechs, banks, and regulators alike.
- Regulatory clarity and seamless integration will define the long term success of India’s CBDC.
The RBI allowing fintechs a niche in the CBDC ecosystem is a breaking point for digital payments; e rupee wallets will be a viable, secure, efficient, and programmable substitute for cash only if widely accepted through awareness and general use, seamless integration, and real life utility.
Source: Mint
