India's central bank, the Reserve Bank of India (RBI), has revealed that as of June, there were five million digital rupee users and 420,000 merchants participating

The Reserve Bank of India (RBI) has unveiled the latest updates on the digital rupee pilot in its report titled Currency and Finance 2023-24. The pilot, which aims to introduce a central bank digital currency (CBDC), has seen significant participation from both users and merchants.

According to the RBI, the digital rupee is designed to complement cash and existing payment systems, catering to both wholesale and retail sectors. The central bank highlighted the importance of CBDCs in enhancing efficiency and reducing costs within the currency management system.

As of June, over 5 million digital rupee users and 420,000 merchants were actively participating in the retail pilot, a testament to its widespread adoption.

The RBI further categorizes CBDCs into wholesale and retail types based on their usage. Wholesale CBDCs are intended for institutional participants in financial markets, while retail CBDCs serve as a risk-free digital medium of exchange for retail consumers.

In the case of the digital rupee pilot, the initial use cases revolved around Person to Person (P2P) and Person to Merchant (P2M) transactions. However, the pilot also explored additional use cases by leveraging programmable and offline functionalities.

As of May 2024, India was among the 36 countries where CBDC initiatives were in the pilot stage. This endeavor aligns with India's broader digital revolution, which includes the transformative Unified Payments Interface (UPI) for retail payments.

The report emphasizes how the adoption of the digital rupee can contribute to financial inclusion, modernize the payment infrastructure, and support accessible financial services.

Moreover, the integration of the digital rupee with international payment systems is expected to enhance cross-border transactions, positioning India as a forerunner in the global digital economy.

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