The Reserve Bank of India (RBI) is making waves in the digital currency domain. In an ambitious move, it plans to expand its digital rupee pilots by rolling out fresh use cases and features for both retail and wholesale central bank digital currencies (CBDCs). This development, highlighted in the RBI’s Annual Report for 2024-25, underscores the central bank’s commitment to enhancing the versatility and accessibility of the digital rupee.
Expanding Horizons: New Features and Use Cases
The RBI is delving into the realms of programmability and offline capabilities for the digital rupee. These features could be game-changers, particularly in areas where internet connectivity is sparse. Imagine government subsidies being seamlessly distributed or corporations implementing spending controls with pinpoint accuracy. That’s the future the RBI envisions.
Currently, both retail and wholesale CBDCs are in the pilot phase. The retail version, which has already garnered 600,000 users across 17 banks, is being tested with select customers and merchants. Meanwhile, the wholesale pilot is focused on the interbank market, with a growing institutional interest. The introduction of four standalone primary dealers (SPDs) has further expanded the scope of this wholesale initiative, signaling a diversified approach to digital currency implementation. This follows a pattern of institutional adoption, which we detailed in our analysis of corporate treasury investments.
Digital Payments: A Surge in Popularity
India’s digital payments landscape is witnessing a meteoric rise. According to the RBI report, the financial year 2024-25 saw a 34.8% surge in digital payment volumes and a 17.9% increase in value. The Unified Payments Interface (UPI) played a pivotal role, propelling India to a leadership position with a staggering 48.5% share in global real-time payments by volume. The introduction of the “Delegated Payments” feature, which allows a secondary user to conduct transactions from a primary user’s bank account, exemplifies the innovative strides being made to democratize digital payments. Similarly, innovations in payment methods are being seen globally, as highlighted in Visa and Baanx Launch USDC Stablecoin Payment Cards.
Regulatory Challenges and Crypto Concerns
However, not all is smooth sailing. On May 20, India’s Supreme Court expressed concerns over the government’s sluggish pace in regulating cryptocurrencies like Bitcoin. Justice Surya Kant highlighted the risks of a “parallel economy” emerging through digital assets, which could pose a threat to India’s financial ecosystem. Despite a hefty 30% tax on crypto profits introduced in April 2022, the regulatory environment remains a contentious topic. Interestingly, India boasts over 100 million digital asset holders, showcasing the country’s robust crypto adoption despite regulatory hurdles.
Looking Ahead: The Road to Wider Adoption
The RBI’s digital rupee initiative is a testament to the evolving financial landscape in India. As the pilot programs progress, the central bank’s focus on programmability and offline usage could make the digital rupee a cornerstone of India’s economic framework. Yet, questions linger—will these innovations translate into widespread adoption? And how will regulatory challenges shape the future of digital currencies in the country?
The coming months could prove pivotal. With a burgeoning digital payments ecosystem and a keen eye on regulatory developments, India stands at the cusp of a digital currency revolution. As the RBI continues to refine and expand its digital rupee projects, the world will be watching closely—waiting to see if this ambitious endeavor can truly transform the way India transacts.
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This article is based on: Reserve Bank of India to roll out new use cases for digital rupee
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
