RBI plans cross-border CBDC pilots amid digital currency experiments

Central bank will expand digital rupee experiments in 2026-27, focusing on cross-border payments, asset tokenisation, programmable money and welfare applications

The Reserve Bank of India (RBI) on Friday said that it would explore bilateral and multilateral cross-border central bank digital currency (CBDC) pilots in 2026-27, as the RBI expands experiments around digital payments, asset tokenisation, and programmable money.

 

In its annual report for 2025-26, the central bank said it would pursue cross-border CBDC pilots “with select use-cases”, and participate in multilateral projects focused on technical and governance standards for cross-border payments.

 

The plans come as the RBI deepens engagement with foreign central banks on CBDC-linked payment infrastructure. In March, Business Standard reported that the RBI was in talks with central banks from four to five countries, including Asian economies and advanced European economies, to develop cross-border CBDC transaction rails for wholesale and retail payments.

 

 

Additionally, the annual report said, in 2026-27, the RBI would also widen domestic CBDC pilots to include additional use-cases in direct benefit transfer (DBT) schemes and business applications. It plans to introduce a framework under its CBDC and Asset Tokenisation sandbox for testing products and services built around CBDC infrastructure.

 

The central bank also said it would explore further pilots involving tokenisation of financial assets alongside settlement using CBDC, while expanding participation in such pilots.

 

The RBI has taken a gradual approach to the rollout of digital currency despite being among the earlier major central banks to begin live pilots. The central bank launched a wholesale CBDC pilot in November 2022, and a retail pilot a month later. It has since expanded the scope of testing but has not announced a full-scale launch.

 

A CBDC is a sovereign digital currency issued by a central bank and it appears as a liability on the central bank’s balance sheet. It is exchangeable at par with physical currency and functions as legal tender.

 

According to the annual report, the retail CBDC pilot has progressed “broadly in line with expectations”, with ongoing work focused on programmability, integration with state and central government schemes, specialised banking products, and cross-border payment capabilities.

 

RBI data shows the value of bank notes in circulation in digital form CBDC-retail (e₹-R) stood at ₹771.66 crore as on March 31, 2026, as compared to ₹1,016.46 crore as on March 31, 2025. Additionally, the value of bank notes in circulation in digital form CBDC-wholesale (e₹-W) stood at “Nil” as on March 31, 2026. It was also “Nil” as on March 31, 2025.

 

“e₹-W is being used for settling large-value transactions among financial institutions. Owing to the auto-redemption feature exercised by the participating banks and non-banks, balances in e₹-W are redeemed back to the underlying current account at the end of the day. Therefore, the balances need not be construed to reflect the transaction volumes and values,” the RBI said.

 

During 2025-26, the central bank expanded the use of programmable CBDC in government welfare programmes. In Gujarat, Puducherry, and Chandigarh, beneficiaries under the public distribution system (PDS) received food subsidies through programmable CBDC that could be redeemed for eligible goods at fair price shops and designated merchants.

 

On the tokenisation side, the RBI developed the Unified Markets Interface (UMI), a platform designed to facilitate tokenisation of financial assets while using wholesale CBDC for settlement. A pilot involving tokenised certificates of deposit was initiated on the platform.

 

The RBI also signed a memorandum of understanding (MoU) with the Monetary Authority of Singapore on digital asset collaboration, and held bilateral discussions with Singapore and the Central Bank of the UAE on operationalising cross-border CBDC pilots.

 

In addition, the RBI has joined BIS Innovation Hub initiatives, including Project Rialto and the second phase of Project Mandala, both aimed at improving cross-border payments using CBDCs.