Indian Digital Rupee Expands Beyond Banks as Cred Joins CBDC Program

Key Notes

• RBI's strategic partnership with Cred introduces fee-free merchant transactions and daily limits up to Rs 50,000, advancing digital payment accessibility.
• Integration with UPI bank accounts enables seamless transfers between CBDC wallets, positioning e-Rupee as a stable digital payment alternative.
• India prioritizes government-backed digital currencies over crypto, aiming to revolutionize cross-border payments and reduce remittance costs.

India’s Reserve Bank of India (RBI) has made a significant leap in its digital currency experiment by partnering with Cred, a prominent fintech company, to roll out the e-Rupee to retail users. This collaboration marks the expansion of the central bank digital currency (CBDC) initiative beyond wholesale transactions into the hands of regular consumers.

After a series of pilot tests that began in late 2022, the e-Rupee is now being made available for retail use. Initially, only public sector banks were involved in the testing of the digital currency, but Cred, backed by investors like Tiger Global and Peak XV, is the first non-bank player to enter the space.

Cred Rolls Out e-Rupee Wallet for Easy Transactions

To initiate the integration of e-Rupee into its platform, Cred has launched a digital wallet for e-Rupee transactions, initially available to select customers.

Although the wallet is still in its beta phase, the company has confirmed that these select users can link their e-Rupee wallets with Unified Payments Interface (UPI) bank accounts, enabling them to send and receive transactions to and from other CBDC wallets.

The wallet allows transactions up to Rs 10,000 per transfer, with a daily limit of Rs 50,000 and a total storage capacity of Rs 1 lakh. In addition, merchant transactions conducted through the e-Rupee wallet will not incur any fees.

The e-Rupee pilot started with the wholesale Central Bank Digital Currency (CBDC) in late 2022, and since then, the Reserve Bank of India (RBI) has been gradually expanding the trial’s scope. In April 2024, the central bank began including private payment firms like Cred in the testing of the retail CBDC.

The retail version of the e-Rupee will operate similarly to other digital wallets in India, such as those used for UPI payments with services like Google Pay, PhonePe, and Amazon Pay. However, the key differentiator for the e-Rupee is its direct backing by the RBI, ensuring its stability and making it a potentially permanent fixture in India’s growing digital economy.

India’s Shift Toward CBDCs, Not Cryptocurrencies

In contrast to the growing global interest in cryptocurrencies like Bitcoin

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and Ethereum

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, India is increasingly focusing on CBDCs.

In a 2024 speech, RBI Governor Shaktikanta Das emphasized the potential of CBDCs to revolutionize cross-border payments and improve the remittance process in India.

According to him, the country is one of the world’s largest recipients of remittances, with billions of dollars flowing in from the Indian diaspora. However, these cross-border transfers often come with high fees and slow processing times.

Das sees CBDCs as a way to streamline these payments and make them faster, cheaper, and more efficient.

Related article: Trump to Sign EO to Ban CBDC Creation, Reveals FOX JournalistDespite India’s thriving crypto market, the government has shown reluctance to adopt private digital currencies. This stance was further underlined in consultations held last year, where regulators voiced concerns over the volatility of assets like stablecoins.

Concerns around the stability of stablecoins, especially after the collapse of TerraUST in 2022, have led officials to seek more secure alternatives. As a result, India is positioning CBDCs as a more stable, regulated, and government-backed solution.

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