Wholesale CBDC circulation falls, whereas retail circulation rises in FY24

Wholesale Central Bank Digital Currency (CBDC) or wholesale e-rupee in circulation fell to Rs 0.08 crore in the financial year 2023-24, against Rs 10.69 crore in the financial year 2022-23, according to the annual report by the Reserve Bank of India. Meanwhile, retail CBDC circulation rose to Rs 234.04 crore from Rs 5.70 crore in the same period.

CBDC is a digital form of currency notes issued by a central bank. The RBI broadly defines e-Re as the legal tender issued by a central bank in digital form.

The central bank had started the pilot on CBDC on the wholesale side from November 1, 2022, while the retail testing was started on December 1. The RBI aimed to increase the daily transaction volume of CBDC retail to 1 million by the end of 2023.

In the monetary policy meeting in April of the current year, the RBI had proposed to make CBDC-R (CBDC-Retail) accessible to a broader population by allowing non-bank payment system operators to offer CBDC wallets. Non-bank payment system operators include third-party payment applications like PhonePe, Google Pay, etc.

According to the RBI, this move is expected to enhance access and expand choices available to the users apart from testing the system resilience to handle multi-channel transactions.

Signalling a shift in focus towards enhancing transaction capabilities, the central bank had also implemented the interoperability of UPI and CBDC in July 2023. This development enables customers to seamlessly transfer funds from a CBDC wallet or directly from a bank account using a unified QR code.