RBI Proposes Non-Bank Operators to Offer eRupee Wallets for Broader Access

The Reserve Bank of India (RBI) has put forth a proposal to make Central Bank Digital Currency (CBDC), known as eRupee, more accessible to a wider range of customers by allowing non-bank payment system operators to provide CBDC wallets.

As per the RBI Governor’s speech on April 5, 2024, the distribution of CBDCs through Non-bank Payment System Operators is already in progress, with ongoing CBDC pilots in both the Retail and Wholesale sectors involving more use-cases and additional participating banks. To expand access to CBDC-Retail in a sustainable manner, the proposal aims to empower non-bank payment system operators to offer CBDC wallets. This move is expected to increase user accessibility and diversify options while testing the CBDC platform’s ability to manage transactions across multiple channels. Necessary adjustments will be implemented to facilitate this transition.

CBDC, or Central Bank Digital Currency, represents a form of legal tender issued by the RBI. It is electronic currency backed by the central bank and functions similarly to traditional paper or polymer currency. According to the RBI website, CBDC appears as a liability (currency in circulation) on the central bank’s balance sheet. The underlying technology, structure, and usage of CBDC can be customized to meet specific needs and can be exchanged at par with physical cash.

The proposal by the RBI reflects efforts to modernize India’s financial system and enhance the efficiency and accessibility of digital transactions. By allowing non-bank entities to offer CBDC wallets, the RBI aims to broaden the reach of eRupee and explore the platform’s capabilities in handling diverse transaction scenarios. This development aligns with the evolving landscape of digital finance and underscores the potential of CBDC to complement existing currency systems.