Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar on Thursday said the central bank digital currency (CBDC) QR codes would be made interoperable with Unified Payment Interface (UPI) mechanism.
Addressing a press conference after the monetary policy statement on Thursday, Sankar said the central bank’s aim was to have 1 million customers by the end of June for CBDC. “The plan is to have 1 million customers by the end of June. The second thing that we are planning is to make its QR code inter-operable with UPI,” Sankar said.
UPI is a platform that facilitates banking transactions or digital transactions, where the beneficiary will be able to make payments through debit or credit cards, internet banking or by mobile wallets.
On the other hand, in CBDC, a beneficiary can draw the digital currency and keep it in their wallet on mobile. When you make a payment at a shop or to another individual, it will move from one wallet to another. There is no routing or intermediation of the bank. Unlike in the case of UPI, money moves between two private entities, individuals or businesses, similar to physical cash, in the case of CBDC.
Sankar said the central bank had not kept any specific date in mind for the CBDC’s official launch. It was on November 1 last year that the RBI came out with digital rupee for the wholesale segment. This was followed by the first pilot for retail digital rupee on December 1. “We have not kept a specific launch date in mind. It will be gradual so that we can assess its impact and move ahead,” Sankar said.
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The pilot was launched in four cities — Mumbai, New Delhi, Bengaluru, and Bhubaneswar — with customers and merchants in a closed user group. It was later extended gradually to cities like Ahmedabad, Chandigarh, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla. Though in the initial phase of pilot, only State Bank of India, ICICI Bank, YES Bank, and IDFC First Bank were part of the CBDC. Later, banks like Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank joined the league.