The trend of central bank digital currency [CBDC] has been spreading worldwide. India, despite its cautious stance on cryptocurrencies, has fully embraced the concept of CBDCs. The nation’s central bank has been actively encouraging banks in the country to adopt and promote the use of the digital rupee. As a result, HDFC Bank, the largest private lender in India, has experienced a surge in interest and participation in the pilot programs of the CBDC.
Now, recent data indicate that HDFC has achieved significant success by enrolling over 100,000 customers and 170,000 merchants in its pilot programs, demonstrating active usage of the digital rupee. This development aligned with the plans outlined by the Reserve Bank of India [RBI]. Just this week, RBI Deputy Governor T Rabi Sankar expressed the bank’s objectives. RBI aimed to reach a milestone of one million CBDC transactions per day by the end of 2023. Currently, CBDC-related transactions are about 5000-10,000. As of June 2023, it is worth noting that the CBDC has been utilized by 1.3 million customers. About 0.3 million merchants were also part of this.
Also Read: India: RBI Urges Lenders to Embrace Its CBDC
HDFC introduces interoperability between UPI and CBDC
HDFC Bank has revealed its plans to introduce an interoperable UPI QR code that can seamlessly integrate with the CBDC. This new feature enables HDFC Bank merchants, who have already joined the bank’s CBDC platform, to accept payments from customers using the digital rupee. The goal behind this initiative is to promote the widespread adoption and everyday usage of the CBDC.
This new feature aims to simplify the utilization of the digital asset. This is done enabling customers to conduct transactions through their CBDC wallet via the UPI QR code. With this integration, customers will be able to make payments across the UPI network using their CBDC wallet. This will further streamline the process. Additionally, merchants will only need to display a single QR code to receive payments. This enhances convenience for both customers and businesses.
Furthermore, Parag Rao, Country Head for Payment, Consumer Finance, Technology & Digital Banking at HDFC Bank said,
“CBDC is a forward-looking initiative and its QR interoperability with the already accepted and widely popular UPI is going to prove greatly beneficial to its usage.”
It is worth noting that there was a record 9.4 billion UPI transactions processed in May 2023.
Also Read: India: Crypto Advocacy Group Pushes To Restore UPI Access For Exchanges