India’s eRupee CBDC to get offline payments facility, programmability changes: RBI Governor

The Reserve Bank of India (RBI) is considering adopting offline strategies to ensure that the eRupee CBDC enters the financial system of rural and remote parts of India. RBI Governor Shaktikanta Das reportedly said that the central bank plans to experiment with offline solutions to drive CBDC adoption in parts of India that are not connected to the internet like developed cities. These plans have reportedly been under discussion since March last year. Das revealed these details while concluding the three-day Monetary Policy Committee (MPC) meeting organized by the RBI on Thursday.

Offline solutions for CBDC adoption will soon enter the testing phase for hilly and rural areas of the country. These programmability-based solutions will include both proximity and non-proximity, Das said without disclosing any more details. “It is proposed to introduce offline functionality in CBDC-R (Retail) to enable transactions in areas with poor or limited internet connectivity,” the RBI governor said. where did it go on Thursday.

RBI plans to allow merchants and corporates to modify the programmability of the CBDC to expand its use cases. These may include travel expenses for company employees.

“Programmability will allow users such as government agencies to ensure that payments have been made for defined benefits. Similarly, corporates will be able to schedule specified expenses such as business travel for their employees,” Das said.

A central bank digital currency, or CBDC, is a virtual representation of any fiat currency on a blockchain network. Shifting transactions from cash notes to a CBDC will reduce the bank’s reliance on paper-based notes and will also maintain permanent financial records that cannot be altered.

India’s digital rupee CBDC was launched by RBI on December 1, 2022 on a pilot basis. In the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced plans to launch a CBDC for testing purposes.

Gradually, several Indian banks including State Bank of India (SBI) and Canara Bank joined the CBDC pilot to test their person-to-person (P2P) and person-to-merchant (P2M) transactions. Currently, eRupee is in its advanced testing stages, with several large state-owned and private lenders participating in these trials along with select small, medium and large scale merchants.

In April last year, Reliance General Insurance started accepting eRupee CBDC for premium payments. Similarly, Reliance Retail also announced last year that it was starting to accept CBDC as payment at its stores in Mumbai.

The Reserve Bank of India reportedly managed to meet its target of one million daily transactions through CBDC by the end of 2023. Indian banks rewarded some employee benefits through digital rupee in December to help the RBI meet its target.


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