After achieving the milestone of 10 lakh CBDC-R (Central Bank Digital Currency - Retail) transactions per day in December 2023, volumes have now settled slightly below this level, Reserve Bank of India Deputy Governor T Rabi Sankar said.

“When we targeted 10 lakh transactions, a lot of co-ordinated efforts were required for it to be reached. Then we found issues in terms of scalability of technology and banks being able to handle that. So for the last few weeks we have largely been addressing those issues,” Sankar said at the sidelines of a technology event organised by Indian Banks’ Association (IBA).

“Transactions have settled at a slightly lower level but it’s much better than what was earlier,” he said, adding that the value of transactions is “some crores”. The central bank will soon issue periodic data on the same in the public domain.

“On the retail side, it’s the technology, how systems cope and how people behave. These are the focus areas, we’re not looking at volumes,” he said adding that matter such as currency use involve a lot of behavioural variables which don’t happen overnight. “They happen slowly, and it’s good that they happen slowly.“

Wholesale CBDC

Under the wholesale e-rupee pilot (CBDC-W), the focus is not on volumes but on trying out new use cases as done in the case of government securities and call money markets so far, Sankar said, adding that uptick in the call market has been good with regular transactions of small amounts.

“Next step we’re thinking of trying out tokenisation of assets, government bonds and such. But we’ll just try them out, we’re not looking to have volumes because the idea is to try out the technology,” he said.

Sankar added that ultimately the benefit under wholesale CBDC will come through cross-border transactions, wehrein there will be a lot of savings in terms of settlement risk. However, cross-border CBDC will take some time because RBI is still testing the technology and it is yet to settle within India.

“We are testing and we are trying out new functions. Let it settle down. Cross-border talks are going on. Some countries have shown interest and we are talking to them, that’s a step ahead,” he said.