RBI’s digital rupee push pays off: Retail CBDC adoption grows 10-fold in 15 months

The Reserve Bank of India’s central bank digital currency (CBDC) has moved from a pilot experiment to a growing — if still nascent — presence on the monetary landscape. As of March 2025, the value of CBDC-Retail (e₹-R) in circulation touched ₹1,016 crore, a 10-fold increase from ₹103 crore in December 2023. This steady rise is backed by widening participation, new use cases, and a broader policy push to make India’s digital rupee more accessible and programmable.

Launched on December 1, 2022, with basic person-to-person and person-to-merchant transactions, the retail pilot has since expanded considerably. As of FY25, the pilot covered 17 banks and 60 lakh users, with a sharp rise in value beginning mid-2024. According to the RBI’s annual report, the currency-GDP ratio also moderated further during FY25, indicating that CBDC and digital payments may be slowly reducing India’s reliance on physical cash.

What’s enabling this scale-up is more than just user familiarity. In April 2024, RBI allowed non-bank payment system operators to distribute CBDC wallets, helping bridge last-mile reach in a market already fluent in UPI. The scope of e₹-Retail was also expanded to include offline transactions and programmability — two features seen as critical for adoption in low-connectivity regions and for targeted public transfers. The programmability feature allows the sponsor entity (government / corporate) or user to ensure that the funds in the CBDC wallets are used for a specific, designated purpose. It can be programmed on different parameters such as expiry date, geo-location, merchant category codes, merchant VPA, etc.

Currently, the programmability use cases are being explored across Direct Benefits Transfer (DBT) schemes, interest subvention scheme, lending, employee allowances for defined purposes, etc. For instance, in Odisha, under the Subhadra Yojana, e₹ has been deployed as a payment channel for around 88,000 beneficiaries. Similarly, direct benefit transfers linked to carbon credit generation, Kisan Credit Card (KCC) loans for tenant farmers, and allowance-based disbursals for meals or fuel are underway at pilot scale through commercial banks. Of the Rs 6.6 lakh crore direct benefit transfers in FY25, over 57% was in kind, and the remainder was in cash transfers to Aadhaar-linked bank accounts.

On the wholesale front, the CBDC-Wholesale pilot has also been expanded, with four standalone primary dealers joining the ecosystem. Wholesale Central Bank Digital Currency (e₹-W) is designed for use by financial institutions and intermediaries, primarily to streamline interbank settlements and large-value transactions. The RBI is exploring cross-border CBDC pilots, both bilaterally and multilaterally, to enhance transparency and reduce turnaround times — especially relevant given India’s status as the world’s largest recipient of remittances.

The RBI’s fintech department has set an ambitious agenda for FY26: scaling up programmable and offline use cases. Participation in global CBDC initiatives — particularly under the Bank for International Settlements Innovation Hub — is also under active consideration.

According to the central bank, discussions are underway with multiple central government Ministries and state governments for leveraging programmability feature of CBDC to transfer funds to beneficiaries with a defined end use.

While CBDC still represents a minuscule share of total notes in circulation — less than 0.003%— a sharp upward trajectory will depend on how quickly government ministries warm up to the idea of digital currency.