Impact on IndiaDigital Rupee is expected to benefit the Indian economy significantly and boost economic growth by enabling various factors such as: Increased financial inclusion. Reduced cost of financial transactions. Increased investments.
Cred becomes the first fintech platform in India to offer access to the e-rupee, a digital currency launched by the Reserve Bank of India. The rollout will initially target a select set of users with YES Bank facilitating the issuance of e-rupee tokens. Adoption of the digital currency has faced challenges globally.
The Reserve Bank of India (RBI) launched its digital currency, the Central Bank Digital Currency (CBDC) or e-Rupee, in November-December 2022 as a pilot program for both wholesale (CBDC-W) and retail (CBDC-R) segments. The digital currency aims to enhance digital transactions, particularly in areas with limited internet connectivity, and is expected to facilitate seamless cross-border payments in the future.
Since its launch, over 4 million customers have been onboarded to the CBDC-R platform. The initiative aligns with India’s broader efforts in digital payments, complementing platforms like UPI. The RBI envisions the e-Rupee as a global trendsetter in digital finance
The introduction of the e-Rupee, India’s Central Bank Digital Currency (CBDC), has had a significant impact on Indian businesses and the economy. Here are some key effects:
1. Increased Financial Inclusion
The e-Rupee provides a secure and efficient payment method, particularly benefiting businesses and individuals in remote areas who have limited access to traditional banking services
2. Reduced Cash Handling Costs
By shifting to digital currency, businesses can reduce expenses related to printing, distributing, and managing physical cash. This leads to cost savings for both companies and the government
3. Enhanced Transaction Efficiency
With faster and more secure digital transactions, businesses can process payments instantly, reducing delays in settlements and improving overall cash flow
4. Lower Informal Economy
The digital nature of the e-Rupee makes transactions more transparent and trackable, reducing tax evasion and boosting government revenues. Businesses operating in the informal sector may be encouraged to shift to the formal economy
5. Secure and Fraud-Resistant Transactions
With advanced encryption and authentication protocols, the e-Rupee reduces the risks of fraud, counterfeiting, and cyber threats in digital transactions
6. Cross-Border Trade Facilitation
The e-Rupee enables seamless cross-border transactions, reducing time and costs associated with international payments. This benefits Indian businesses involved in global trade
7. Impact on Banks and Fintech
Since digital currency transactions may not require traditional banks as intermediaries, banks could see a shift in CASA (Current Account Savings Account) deposits. However, fintech companies stand to benefit from the increased adoption of digital payments
Challenges and Future Outlook
While the e-Rupee offers multiple advantages, concerns remain about regulatory oversight, anonymity in transactions, and its integration into India’s existing financial ecosystem. The RBI is expected to introduce more clarity on these aspects in the coming months
The digital currency is likely to revolutionize India’s business landscape, much like UPI did for online payments, making financial transactions more accessible and efficient.
Share this content: