Five days since the launch of retail e-rupee pilot, banks and the RBI are enthusiastic about the initial response and operational efficiency. But, engagement in value terms has been quite low. This is the case with wholesale and retail segments of digital currencies, say bankers, though the enthusiasm in the retail space has been quite brisk.

Industry participants said because the technology has only been introduced to a ‘closed user group’ of select customers, the usage is controlled. Thus, true volumes can only be tracked and scaled once the ecosystem is opened up to everyone.

“There is FOMO (fear of missing out) among people to try it (retail e-rupee) out. We’ve had some senior executives in the fintech space who have opened bank accounts with YES Bank just to try out the CBDC,” said Ajay Rajan, country head - transaction banking at YES Bank. On Monday, the bank partnered with Indian Oil Corporation to extend the retail digital currency for merchants.

As such, e-rupee operations are running smoothly and there are no glitches being reported so far, including from customers, bankers said.

The process of indenting or obtaining tokens from the RBI is smooth and the customers we have reached out to are also downloading and trying it out. “So volumes will build. Once the journey is smooth and experience is easy, the basics are set. It is a matter of scaling up,” a banker said. At present, e-rupee is restricted to Android phones and hence banks are also calibrating its usage..

Another banker said that they “feel good about it” and are happy with the throughput and response, also because the process is very similar to using UPI and due to the advantage of cash-like anonymity.

“We have had customers reach out to us through branches for retail,” said Rajan.

However, bankers believe that it is too early to declare the ecosystem is working properly as volumes are still low and the true test will only be once it can handle higher and large-ticket transaction volumes.

“Interest is higher among the P2C segment rather than P2M. and the wallet balances are also low at around Rs 2,000 - 5,000”, said another banker.

Wholesale e-rupee

Launched one-month prior to the retail e-rupee, the wholesale e-rupee pilot--introduced initially for secondary market gilt settlements--has also seen a mixed response.

A cumulative ₹7,140 crore of government securities have been settled via the digital rupee, with volumes peaking at ₹615 crore on November 9 and averaging at around ₹200-250 crore.

Market participants expect that once the system is opened up for all, participation by more banks will help boost transaction volumes and also give more confidence to dealers to use the e-rupee regularly.

RBI Deputy Governor T Rabi Sankar, on Saturday, said that even though CBDC (central bank digital currency) volumes are not very high, the infrastructure has potentially game-changing use cases in the future, particularly in the area of cross border transactions.

The initial pilots are focused on ensuring that the systems are working, and will help in identifying the right technology and architecture for distribution of the digital currency. The next step would probably be trying out CBDC using blockchain or extending it to other money markets.

“We can have smart contracts, bonds tokenized, and many other possibilities following from here,” he had said, adding that benefits can also emerge in terms of settlement efficiency.

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