Google Pay, PhonePe, and Other Companies to Participate in RBI's Digital Currency Pilot
According to a media agency, several prominent fintech companies have decided to participate in the digital currency pilot program run by the Indian central bank. These companies include Google Pay, PhonePe, Cred, Mobikwik, and AmazonPay.
According to sources who spoke with the news agency, the corporations will accomplish this by providing e-rupee transactions.
Notably, the digital currency pilot program was launched by the Reserve Bank of India (RBI) in December 2022.
At first, the only financial institutions authorized to sell e-rupee through their mobile apps were the central bank. However, fintechs were also permitted to offer e-rupee transactions after RBI's permission in April of this year.
Then, rumor has it that fintech companies are requesting the central bank clarify the norms of interaction with banks so they can implement use cases for central bank digital currency (CBDC).
Fintech companies are reportedly collaborating with the Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI), and the domestic payment authorities in preparation for the e-rupee's launch in the coming three to four months, according to a prominent news agency's report.
According to the research, the number of digital currency transactions has dropped significantly from over 1 million per day last year to about 1-2 lakh each day.
Use Cases for Retail CBDCs
This news arrives as reports surface that banks are collaborating with fintech entrepreneurs on a range of fronts to launch retail use cases for Central Bank Digital Currency (CBDCs).
The first round of the CBDC retail trial for NBPSOs is testing two significant use cases. One involves corporate cost management and the other involves subsidy payments for agricultural supplies.
Banks are presently focussing on deploying these use cases, and they will now also collaborate closely with fintech firms to support the CBDC trial.
Following the beginning of the Central Bank Digital Currency (CBDC) experiment in December 2022, RBI deputy governor T Rabi Sankar announced in April that 2.2 crore transactions had been handled.
What is CBDC?
The Reserve Bank of India (RBI) has created CBDCs, a digital token equivalent to the Rupee. Using distributed ledger technology (DLT), it could one day replace physical currency with digital transactions.
The CBDC pilot has been serving both the wholesale and retail sectors since its start in 2022, and an increasing number of institutions are rushing to become a part of it.
The country's Central Bank unveiled new features, like the ability to make CBDC retail payments offline and using user-defined algorithms, in February of this year to boost CBDC sales.
Avantika Bhardwaj
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