India’s Digital Currency Transactions Top One Million Daily

In India, in December, local financial institutions paid some benefits to their employees in digital rupees.

India’s Digital Currency Transactions Top One Million Daily

As a result of the mentioned decision, the efforts of the Reserve Bank of India to achieve the goal of one million daily transactions in virtual money by the end of 2023 were supported. The specified result has been achieved. The relevant information was published by the media with reference to insiders.

The central bank’s digital currency (CBDC), which in the mentioned South Asian country was named the electronic rupee, was developed as a virtual alternative to physical cash and was created using distributed-ledger technology.

The RBI launched its digital currency in test mode in December 2022. By the end of October, the number of transactions using the electronic rupee was 25,000 per day. The possibilities of applying digital currency have been significantly expanded as a result of linking it to the popular United Payments Interface (UPI), a platform that simplifies peer-to-peer money transfers through mobile apps.

Last month, some large private and public financial institutions transferred digital rupee amounts related to employee benefit schemes. These funds were transferred directly to CBDC wallets. The media, citing insiders, report that in this case, salary accounts were not used.

The total number of operations with the electronic rupee reached one million on December 27. The relevant information is contained in a letter from Governor RBI Shaktikanta Das to employees dated December 29. Also, in a separate letter from one of the financial institutions involved in the e-rupee project, it is claimed that this organization was recommended to contribute funds and employee benefits using digital currency.

According to the journalists’ informants, such financial institutions as HDFC Bank, Kotak Mahindra Bank, Axis Bank, Canara Bank, and IDFC First Bank transferred payments in digital money to their employees.

The RBI expects that companies operating outside the financial sector will also use digital currency, which will contribute to an increase in the volume of relevant transactions.

RBI conducts CBDC pilot projects for retail and wholesale trade. More than ten financial institutions are involved in the initiative to use digital money in the retail sphere. This project has been launched in more than 15 cities. So far, there is no information on when a full-scale e-rupee retail system will be deployed.

The media also report that the All India Bank Employees Federation is unhappy with the current actions of the heads of financial institutions aimed at expanding the use of digital currency. The position of this organization is based on the postulate that bank employees cannot be forced to the using of mobile wallets.

All India Union Bank Employees Association General Secretary, N. Shankar holds a different opinion. According to him, there is no problem or contradiction in the fact that a financial institution offering digital currency to customers is starting to offer it to employees. He noted that the RBI and the government of India are striving to increase the number of transactions with the electronic rupee. In his opinion, there is nothing wrong with the fact that one of the ways to achieve the corresponding goal is to provide digital money to employees of organizations.

As we have reported earlier, India to Block Crypto Exchange Websites.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.