Several countries, including India, are expanding central bank digital currency (CBDC) trials in the hope of integrating them with existing financial systems. The Reserve Bank of India has proposed extending support for digital rupee CBDC in the retail ecosystem beyond banks. In the coming days, the Reserve Bank of India is expected to start circulating digital rupees through payment system operators that are not part of the banking system. Yogesh Dayal, chief general manager of the Reserve Bank of India, disclosed the details in a statement on Friday.

So far, CBDC distribution in India has been done by banks as part of its trials. However, going forward, the Reserve Bank of India may allow platforms like Google Pay and PhonePe to distribute digital rupees in the retail ecosystem.

“CBDC pilots in the retail and wholesale sectors are ongoing, with more use cases and more participating banks. Continuing this approach, it is proposed to reach a wider user base in an ongoing manner by enabling non-bank payment system operators to offer CBDC wallets Being able to use CBDC for retail.” explain in a prepared statement issued by the Reserve Bank of India.

CBDC is a virtual representation of a country’s fiat currency. They are built on a blockchain network and work like cryptocurrencies but are issued by central banks. Through CBDC, people can process large payments quickly, and all transaction history will be stored in a permanent, unchangeable format.

“In addition to testing the resilience of the CBDC platform to handle multi-channel transactions, this is expected to enhance user access and expand user choices. Necessary changes to the system will be made to facilitate this, the official said in the statement.

Since December 2022, the Reserve Bank of India has made impressive achievements in research and development around the digital rupee. CBDC is currently in advanced trial stages in India.

In February this year, the Reserve Bank of India had stated that it planned to trial offline solutions to promote the adoption of CBDC in areas of India that are not as Internet connected as developed cities.

In 2023, the State Bank of India introduced UPI interoperability with the digital rupee. Canara Bank has launched a similar product.

“As per data published in the RBI’s balance sheet as on March 31, 2023, the e-rupee price issued for CBDC (retail) is Rs 570 crore,” the RBI said in its reply to an RTI appeal in February.