Context:
The Digital Rupee (e₹) is a central bank digital currency (CBDC) issued by the Reserve Bank of India (RBI), functioning as a digital version of cash. Unlike cryptocurrencies, it is a legal tender backed by the RBI.
Key Features of e₹:
- Digital Cash Alternative – Works like physical money but stored in a digital wallet.
- Programmable Payments – Can be restricted for specific uses (e.g., subsidies, employee benefits).
- Offline Transactions – Future feature allowing payments without internet.
- UPI Compatibility – Can scan UPI QR codes, converting e₹ into regular money in the merchant’s account.
- No Interest Earned – Like holding cash, it does not accrue interest.
How It Differs from UPI & Cryptocurrencies
- vs. UPI: UPI transfers money between bank accounts, while e₹ is a direct digital cash substitute.
- vs. Cryptocurrencies: Unlike decentralized cryptos (e.g., Bitcoin), e₹ is centralized and RBI-backed.
Current Status (2025)
- Circulation: Grew from ₹234 crore (2024) to ₹1,016.5 crore (March 2025).
- Users: 6 million across 17 banks.
- Pilot Banks: SBI, HDFC, ICICI, Axis, Yes Bank, and others.
- Future Plans: Cross-border payments, reducing remittance costs, and expanding offline transactions.
Anonymity & Usage
- Not Fully Anonymous – Requires KYC (like a bank account).
- Wholesale e₹ (e₹-W) – Used for interbank settlements, not retail transactions.
The Digital Rupee aims to modernize payments, reduce cash dependency, and enhance financial inclusion in India’s digital economy.
