Anika Begay
According to the Reserve Bank of India (RBI), major internet and retail giants such as Google, Amazon and Walmart are showing a lot of interest in participating in the ongoing pilot program for India’s central bank digital currency (CBDC), also known as e-rupee.
This latest development, according to a Reuters report, is a demonstration of the popularity of digital currencies and the opportunity these companies have to use their vast payment networks to drive adoption of the e-rupee.
Starting from December 2022, the e-rupee trial has become exclusive to banks. But the RBI recently expanded eligibility to include payment companies, so services like PhonePe, Google Pay and Amazon Pay can take part.
Collectively, these companies handle over 85% of all digital currency payments made in India through the Unified Payments Interface (UPI), processing nearly 13 billion transactions per month.
Increase participation in the digital currency pilot project
Expanding the testing program was the right thing for the RBI to do as part of its larger plan to promote e-rupee. The aim of this digital money project is to make financial transactions more secure and efficient by turning them into digital files.
The move also aims to ensure that the digital currency is strong and reliable before its widespread use, thus strengthening public confidence in the new system.
Total crypto market cap at $1.77 trillion on the daily chart: TradingView.com
The expanded pilot project helps the RBI gather more information and insights into the use cases of the e-rupee, thereby improving the efficiency of the payment system and promoting broader financial inclusion across the country.
State Bank of India, ICICI Bank and HDFC Bank are participating in the pilot program. After incorporating major payment systems, the central bank expects to see an increase in transaction volumes and increased user engagement with digital money.
Digital wallets allow users to hold and transfer e-rupees like cash. The pilot initiative started in New Delhi and Mumbai, and will later expand to Hyderabad and Ahmedabad. The RBI plans to expand e-rupee partner financial institutions and locations step by step.
Will the presence of tech giants have an impact?
While the number of digital currency transactions peaked at over a million per day in the beginning, usage has since declined to an average of 100,000-200,000 per day. The RBI’s move to include well-known payment companies is expected to spark renewed interest in digital currency and encourage more people to engage with it.
The RBI said the pilot program will continue for several years and that it has no plans to introduce e-rupee on a large scale at present. This meticulous approach ensures that digital money is tested and improved before widespread use.
Featured image from Live Science, chart from TradingView
