India’s Central Bank Working To Boost Retail CBDC Volume Through Offline Capability
The Reserve Bank of India (RBI) is working to expand the use of its Central Bank Digital Currency (CBDC) by actively developing an offline transfer capability.
At the BIS Innovation Summit 2024, RBI Governor Shaktikanta Das highlighted an increase in retail transactions using India’s digital rupee (CBDC), The Economic Times reported Monday.
However, he acknowledged the need for further initiatives to match the widespread adoption of unified payments interface (UPI).
“We have leveraged the existing merchant infrastructure on the UPI to facilitate CBDC transactions,” Das said. “While the number of transactions have reached a high of 1 million a day, we still see preference for UPI among the retail users. We of course hope that this will change going forward.”
An offline mode for CBDCs would let people make transactions even without internet access, mimicking a key advantage of cash. The governor also reaffirmed that CBDC will offer anonymity similar to cash.
“Anonymity can be addressed through legislation and/or through technology. For example, through permanent deletion of transactions. That could be one method. The basic principle is that CBDC can have the same degree of anonymity as cash. No more and no less,” he said.
Das also reassured the public that India’s digital rupee was designed to not offer interest, unlike traditional bank deposits. This, he explained, safeguards banks’ business models.
“This feature should mitigate any potential risk of bank disintermediation,” he said.
He also said that the RBI is working on connecting fast-payment systems like UPI with the upcoming CBDC, respond to calls from retail users.
One step the bank is taking is allowing a single QR code to work for both UPI and CBDC payments,
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