e-Rupee yet to take off in a big way

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Five months after the launch of the central bank-retail digital currency (CBDC – retail) commonly referred to as the e-hash of the rupee, the retail digital currency has reached Rs 5.7 crore, according to the RBI’s annual report for FY23.

The total turnover of e-rupees in circulation was INR 10.69 crore on March 31, 2023. The digital currencies together account for Rs 16.39 crore, which is not even 0.0001 per cent of the total banknotes in circulation.

Both digital currencies are currently in the testing or beta phase. E-Rupee Wholesale was launched on November 1, 2022 and E-Rupee Sale was launched a month later. While wholesale digital currency is now limited to the settlement of secondary market transactions in government securities or G-Secs, retail digital currency is widely available for use as physical cash. However, only four banks – YES Bank, IDFC First Bank, ICICI Bank and State Bank of India were involved in the first phase of the e-rupee e-retail trial.

Over the period 2023-2424, the Reserve Bank aims to expand the ongoing pilot programs at CBDC-Retail and CBDC-Wholesale by integrating different use cases and features. It is proposed to expand the pilot program at CBDC-Retail to more locations to include more participating banks, according to the RBI’s annual report for FY23.

Too few to count

Interestingly, with the $500 E-Rupee retail coin representing the maximum denomination in circulation by value (47.5% share), the $1 denomination is the popular pick based on volume of denominations in circulation (22.2% share) according to For the RBI report (see table).

Bank officials say active experimentation has only picked up momentum since February and there is still resistance among customers to adopting the digital currency. “The use cases are quite restricted and thus people often say they don’t want another digital payment app parked on their mobile phone,” said a senior official at a private bank. “I think we still need to communicate more with people to make them understand how electronic hashing of the rupee and UPI are two different things and can be used simultaneously. Some tech-savvy clients understand this, but not everything”.

Also, banks say that while there are still some bugs in the system, it’s hard to test and fix without critical mass. “It’s a chicken and egg situation,” one banker explained, noting that unless volumes increase significantly correcting errors can become difficult. But to increase volumes, errors must be addressed in order to gain customer trust. Most bankers feel it may take at least six months to extend the e-rupee retail trial to more banks, although the use cases may increase soon.