India may take the next big leap in its eRupee central bank digital currency (CBDC) venture any day now. The Reserve Bank of India (RBI) could soon facilitate CBDC payments via existing UPI QR codes. The deployment of this interoperability element to the eRupee CBDC has been in the pipeline for a while now. Since UPI scanners are already widely used around the country for instant online payments, their acceptance of CBDC payments would bring an ease to using India’s national digital currency.
During a G20 event last week, representatives from the RBI had said that the ability to facilitate CBDC payments via UPI QR codes will be deployed at the end of the month, Doordarshan had reported at the time.
As per the report, an announcement on CBDC payments via UPI is expected around the end of July and could arrive in the coming days. Once the service is live, retailers accepting India’s CBDC as a payment option, would just have to extend their existing QR codes to their customers and let them scan them for payments to go through.
At present, multiple large state-owned and private lenders, including State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Yes Bank, are participating with the RBI in the ongoing CBDC trials.
Select small, medium, and big level merchants are also helping the RBI test how smooth CBDC transactions could be in a real-life retail setting. Indian billionaire Mukesh Ambani’s chain of retail stores are also accepting CBDC payments in Mumbai since February this year.
CBDCs function like cryptocurrencies, but they are regularised and issued by the central banks. Digital currencies not only smoothen online payment systems, but also reduce dependency on cash notes.
The pilot for the retail digital rupee was launched in Mumbai, New Delhi, Bengaluru and Bhubaneswar on December 1, 2022.
Amid ongoing eRupee trials, RBI governor Shaktikanta Das recently said that CBDCs will bring a fundamental change in the currency system we are accustomed to today.
Das has reportedly predicted that CBDCs would become popular globally, just like UPI is popular in India.