India’s largest private sector bank, HDFC, recently revealed it has signed up over 100,000 users into its digital rupee pilot.
HDFC, which boasts over 68 million customers, also claimed to have onboarded over 170,000 merchants to the central bank digital currency (CBDC) pilot.
The Mumbai-based bank has also announced the integration of the digital rupee with the unified payment interface (UPI), India’s instant payment system. This will allow merchants on HDFC’s platform to accept payments in the e-rupee from customers using the UPI system. The merchants can now display one QR code that redirects customers to UPI or the digital rupee wallet when scanned.
Speaking on the integration, the head of payments and digital banking at the bank, Parag Rao, described it as the “best in class.”
“CBDC is a forward-looking initiative, and its QR interoperability with the already accepted and widely popular UPI is going to prove greatly beneficial to its usage.”
HDFC is heeding a rallying call by the Reserve Bank of India (RBI) to banks, urging them to champion the adoption of the digital rupee. RBI aims to push the transaction count to a million a day by the end of the year, up from the current 5,000-10,000.
The central bank is currently working with 13 commercial banks on the initiative. Collectively, the banks have signed up 1.3 million users and 300,000 merchants, RBI Deputy Governor Rabi Sankar claimed recently. At the start of May this year, the pilot only had 100,000 users.
The RBI has reportedly pushed commercial banks to offer the e-rupee behind the scenes. According to three sources who spoke to Reuters, the regulator wants smaller banks to “either tie up with fintech players or develop their systems to start CBDC pilots this year.”
“By getting more banks to participate in the pilots, the RBI wants to see if there are any glitches in implementation and conduct pilots on a large user base,” stated another unnamed source working with one of India’s largest India’s state-owned banks.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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