Top U.S. tech giants such as Amazon and Google are reportedly aiming to join India's central bank digital currency (CBDC) trial. The Reserve Bank of India (RBI) has now invited non-bank payment firms to be part of this digital project.
Sources said Amazon Pay, GooglePay, and Walmart-backed PhonePe are exploring standing up to transactions using the CBDC of the Indian central bank, known as the e-rupee. Indian fintech companies Cred and Mobikwik have also applied to join the trial, but it's unclear when they will start participating.
Initially, only Indian banks were allowed to process e-rupee transactions through their mobile apps. However, in April, the RBI said that payment companies could soon join the trial too.
The e-rupee, a digital avatar of the Indian Rupee, was launched by the RBI in December 2022. Right after the launch, RBI officials were touting the privacy features of the e-rupee, arguing that transactions would remain somewhat anonymous.
Against these promises, the adoption of the CBDC has been slow. By late June, the RBI reported reaching 1 million retail transactions with the e-rupee, but only after local banks started giving incentives to customers and paying part of their employees' salaries with the digital currency.
The RBI had earlier prodded banks to scale up transactions in synthetic CBDCs to the tune of 1 million per day by end-2023, thereby subjecting the system to a stress test in terms of scalability. But that nudge has now gone, with the raising of key questions ahead: whether these incentivized metrics can ever be greater in this digital currency project than actual real user metrics.
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