Google Pay, Walmart-backed PhonePe, and Amazon Pay are among five payment firms seeking to participate in India’s central bank digital currency (CBDC) pilot, according to a new report from Reuters.
Sources, speaking on condition of anonymity, told Reuters that these firms are working with the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to enable e-rupee access on their platforms. The rollout is expected within the next three to four months, the sources claimed.
These payment platforms, particularly Google Pay and Amazon Pay, facilitate transactions over India’s widely used Unified Payments Interface (UPI).
The RBI introduced the e-rupee pilot in December 2022 as a digital substitute for physical currency. Initially, only banks were authorized to conduct e-rupee transactions through their mobile apps. However, in April 2024, the central bank extended this authorization to payment firms, subject to regulatory approval.
This development comes as the CBDC reportedly saw a decline in usage, with daily retail transactions dropping from 1 million in December 2023 to about 100,000 as of June 2024. This decrease comes after the incentives (like paying bank employees salaries in the currency) the central bank established to boost its use in transactions expired.
Notably, the RBI has stated that it does not plan to extend the validity of these incentives but instead waits for the CBDC’s adoption to grow as more use cases are established.
These moves highlight the growing global interest in CBDCs, particularly for wholesale transactions, as central banks explore digital alternatives to traditional currencies.
In related news, the Philippines’ central bank has announced plans to launch its wholesale CBDC, Project Agila, by 2029. Meanwhile, the Swiss National Bank is extending its institutional CBDC pilot for at least two more years, having already issued 750 million Swiss francs ($830.38 million) in digital bonds.
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