India's Digital Rupee Crossed a Million Transactions in 1 Day With Some Help From Banks

The retail CBDC pilot is active in more than 15 cities with more than a dozen banks participating.

AccessTimeIconJan 4, 2024 at 3:20 p.m. UTC
Updated Mar 8, 2024 at 7:22 p.m. UTC

India's central bank digital currency, the digital rupee, crossed a million transactions in a day on Dec. 27, 2023 – but with at least a little help from retail banks' own employees.

CoinDesk has viewed a letter dated Dec. 29 by the Reserve Bank of India (RBI) Governor Shaktikanta Das to staff that said the usage of the e-rupee (CBDC) "exceeded the milestone of 1 million transactions in a day on Dec. 27, 2023." A separate letter from one of the banks participating in the e-rupee pilot said it had been encouraged to deposit employee funds and benefits using the CBDC, rather than use the existing fiat currency.

The usage of the word "day" reflects this was a one-time milestone and it is likely not a daily occurrence yet. However, the stated original target was 1 million transactions per day by the end of 2023. It isn't clear whether usage has hit a daily transaction volume of more than 1 million.

The RBI is running both retail and wholesale CBDC pilots. The retail CBDC pilot is active in more than 15 cities with more than a dozen banks participating. The pilot began on Dec. 1, 2022 but the RBI has not announced a timeline for rolling out a full-scale retail CBDC. India already has a ubiquitous cashless movement: the Unified Payments Interface (UPI). As a result, the digital rupee has struggled to reach high transaction volumes, averaging only around 25,000 a day. The RBI has been trying to increase its transaction volumes for the past few months, a source told CoinDesk previously.

The 1 million transactions milestone for one day was achieved after some government-owned and private sector banks deposited the salaries and benefits of their employees into their CBDC wallets last month, according to Reuters. The report named HDFC Bank, Kotak Mahindra Bank, Axis Bank, Canara Bank and IDFC First Bank.

Another report said one of those banks was also Union Bank of India, a government-owned entity.

“With an aim to promote CBDC wallet transactions, banks have been advised to encourage all staff members to transact using the digital currency and ensure 100% staff registration on digital rupee app,” the bank said in a communication to employees on December 26.

Bank management had decided to credit newspaper allowance directly to the CBDC wallet as a start. The bank advised all its employees to register on the bank’s digital rupee app.

The report also stated that the All India Union Bank Employees Federation – a trade union for bank employees – is unhappy with the move, saying that the management cannot compel employees to use the wallet. The body didn't immediately respond to a CoinDesk request for comment.

A representative from a separate group, the All India Union Bank Employees Association, struck a different tone in an interview with CoinDesk. The Association's general Secretary, N. Shankar, said the federation was a "minority" body.

"If a bank offers CBDC services to customers why wouldn’t it offer to its employees? There is no issue at all. It is not an inconvenience," he said. "The RBI and the government want to increase wallet account transactions. One way of increasing the transactions is habituating your own staff members’ wallet accounts. That is one way of doing it. There is nothing wrong in that."

The RBI and the banking sector often collaborate on promoting what they consider best practices but it isn't clear whether banks have previously gone this far.

The RBI didn't immediately respond to a CoinDesk request for comment.

Edited by Nikhilesh De.


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Amitoj Singh

Amitoj Singh is a CoinDesk reporter.