In the latest boost to India’s plans to launch a digital currency, Reliance Retail announced it is all set to start accepting payments through central bank digital currency (CBDC).
Here are all the details
Reliance Retail said it has partnered with private-sector banks ICICI Bank and Kotak Mahindra Bank to make CBDC transactions possible. It has also partnered with Innoviti Technologies, a fintech platform to make in-store e-rupee transactions possible.
“This historic initiative of pioneering the digital currency acceptance at our stores is in line with the company’s strategic vision of offering the power of choice to Indian consumers,” V Subramaniam, Director of Reliance Retail, said.
“With more Indians willing to transact digitally, this initiative will help us provide yet another efficient and secure alternative payment method to customers at our stores,” he added.
All about Reliance Retail Initiative
“We are starting in Mumbai, with our Freshpik store at Jio World Drive. And as we go forward in the next couple of months, it (CBDC payments) will be available across all stores in Mumbai,” Subramaniam told News18. After covering the financial capital, the retail firm plans to enable this service in outlets across the country.
Once enabled by Reliance Retail, customers can pay the amount via digital rupee or e-rupee. All they need to do is scan a specific QR code available at the store. Presently, these codes accept UPI payments. Soon enough, they will also take CBDC, thus boosting cashless transactions.
Although this initiative has been communicated clearly, the exact timeline is still unknown. When asked about the rolling-out period, the director stated, “It all depends on the RBI. But Mumbai perse, we are ready to roll out CBDC payments.”
Netizens react to Reliance’s CBDC move
Immediately after the move was announced, netizens took to Twitter to express their opinion about Reliance’s entry into CBDC.
“Reliance Retail becomes the first retailer to begin accepting digital rupee (#CBDC) for sales. UPI is already doing great, let’s see what CBDC can do”, stated Badal Khatri.
Reliance Retail becomes first retailer to begin accepting digital rupee (#CBDC) for sales.
UPI is already doing great, let’s see what CBDC can do.🙌🏻
— Badal Khatri (BK)☀️ (@BadalKhatriBK) February 3, 2023
While most welcomed the move, some netizens had pressing questions to ask. “As a consumer, how can I get CBDC?” asked Amit, a Twitter user. While the central bank aspires to normalize CBDC payments in the future, there is still a long way to go. Moreover, RBI is expected to provide a detailed explanation of how e-rupee transactions will pan out for citizens.
As a consumer, how can I get cbdc?
From where can I exchange normal money to digital money?
— Amit | akverma.lens (@RubiskCubisk) February 3, 2023
Another looming question pertained to the difference between CBDC and UPI payments.
“What are the benefits of CBDC as against UPI? I know the difference but I just can’t seem to understand the benefits,” asked another Twitter user.
Unified Payments Interface (UPI) payments are already propagating a cashless economy, eliminating the use of paper money. Would CBDC also do so once it is actively circulated? The question is how will e-rupee “uniquely benefit” citizens in terms of transactions? This is another question that requires more clarity from the RBI.
Overview of CBDC
In the latter half of 2022, the Reserve Bank of India (RBI) announced the launch of CBDC in a bid to promote a cashless economy. Among many objectives, CBDC also aimed to promote financial inclusion by converting the “unbanked” into “banked.”
Subsequently, pilot projects were launched for each CBDC type, i.e., Wholesale CBDC or CBDC-W and Retail CBDC or CBDC-R. Currently, access to both types is restricted to a few banks and government organizations.
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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