Is India’s Adoption of e-RUPI a Prelude to CBDC?
Recently, Narendra Modi, the Prime Minister of India launched e-RUPI. This is a digital voucher program aimed at boosting the country’s fintech sector. The Indian government is currently taking steps to digitize payments and transactions and this new launch of the e-RUPI is one step forward in achieving this. Despite this there is still a concern, as the question is with the launch of e-RUPI already, what role would a central bank digital currency [CBDC] play?
e-RUPI Versus CBDC
India went through an immense and sudden development in the digital currency market over a couple of years. The advent of the pandemic can be seen as a major factor in boosting India’s digital economy. Following data reports, about $8 billion was moved through 80 million transactions during the financial year, 2021 and cryptocurrency firms in the country like Coinswitch Kuber were now worth over $500 million.
In recent news, India will be accepting a new and revolutionised digital money instrument through e-RUPI. However, the notion behind fostering e-RUPI and CBDC has been coinciding. The reports held that the Prime Minister stated that e-RUPI will ensure that the money is utilized towards giving benefits and assistance. He also mentioned that though technology used to be deemed the world of the rich, and little room was provided for it in developing countries like India, however, the times are changing and technology is reaching every nook and cranny.
Launch of CBDC
Today, technology has become available to almost all Indians and the government considers it as a means to aid the poor, and also promote their advancement. Though the government is yet to dismiss cryptocurrencies, they were more inclined to the notion of a CBDC, and following the current report from the deputy governor of the central bank of India, they will be disclosing India’s CBDC model by December this year.
Crypto enthusiasts in India viewed this report as an opportunity to demonstrate that crypto-assets and standards to improve the digital ecosystem can exist together. Many crypto exchanges are optimistic that the launch of e-RUPI could allow for the acceptance of other digital currencies in the future. With a population of 190 million unbanked, India is on the verge of keeping up a large-scale technological adoption using the e-RUPI. However, only time can tell if the country would show similar enthusiasm for a central bank digital currency (CBDC).
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