The Digital Rupee, or e₹, is India’s Central Bank Digital Currency (CBDC), issued by the Reserve Bank of India (RBI). Launched in pilot phases since 2022, it represents a digital equivalent to physical cash, aiming to modernize payments while complementing existing systems like UPI. As of November 20, 2025, e₹ remains in pilot mode, with ongoing testing for scalability, security, and adoption. Below is a detailed overview based on official RBI guidelines.
Definition and Legal Status
e₹ is the digital form of the Indian Rupee (₹), functioning like physical currency but stored electronically in digital wallets. It offers the same features as cash, including convenience, RBI guarantee, and settlement finality. Under Section 26 of the RBI Act, 1934, every e₹ banknote is legal tender anywhere in India for the amount stated, guaranteed by the Central Government. As a liability of the RBI, it holds the same value as fiat currency—no interest is earned on balances, mirroring physical notes.
Objectives
The primary goals are to enhance the efficiency, resilience, and accessibility of India’s payment ecosystem. For retail e₹, it promotes financial inclusion by enabling instant, low-cost transactions, especially in remote areas. Wholesale e₹ targets interbank settlements to reduce risks, costs, and settlement times in financial markets. Pilots focus on testing technology, architecture, use cases, and public acceptance without disrupting the economy.
Features and Technology
• Core Functionality: Supports person-to-person (P2P) and person-to-merchant (P2M) payments. Users can send/receive money or pay for goods/services via apps.
• Offline Capability: Mirrors physical cash by allowing transactions without internet—P2P via telecom (no data needed), P2M via NFC on POS terminals. Ideal for areas with poor connectivity.
• Programmability: Funds can be restricted (e.g., expiry dates, geo-fencing, merchant categories) for targeted uses like Direct Benefit Transfers (DBT), subsidies, or employee allowances. Supports smart contracts in wholesale for automated settlements.
• Other Features: Handles fractional values (up to two decimals); provides “change” (e.g., pay ₹20 for ₹15 item, get ₹5 back); no transaction fees; 24/7 availability.
• Technology Stack: Issued electronically by RBI; uses distributed ledger technology (DLT) elements for security and traceability, but not fully blockchain-based to ensure scalability.
Issuance and Distribution
RBI creates and issues e₹ electronically, similar to printing physical notes. It distributes to authorized banks and non-banks (Payment Service Providers or PSPs), who onboard users and provide e₹ wallets. Users load wallets from linked bank accounts (via NEFT/IMPS/UPI). No separate KYC is needed if the bank account is verified; new simplified models are under testing. Redemption back to bank accounts is seamless and instant.
Pilots
e₹ pilots are controlled, limited-scale rollouts to validate the system.
• Retail Pilot:
• Launched: December 1, 2022.
• Scope: Nationwide, involving real users and merchants.
• Participants: 19 banks offering e₹ apps/wallets, including SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, and others like Canara Bank, PNB, and UCO Bank.
• Testing: Everyday transactions, offline features, and programmability.
• Wholesale Pilot:
• Launched: November 1, 2022.
• Scope: Restricted to financial institutions for interbank activities.
• Participants: 14 banks and non-banks.
• Use Cases: (1) Settlement of secondary market trades in Government Securities; (2) Interbank call money market lending/borrowing; (3) Tokenized issuance/settlement of Certificates of Deposits.
• Focus: Efficiency gains, like same-day settlements without collateral.
As of November 2025, both pilots are active and expanding, with over 5 million retail wallets issued and transaction volumes growing steadily.
How to Use
1. Download App: Get the official e₹ app from your pilot bank’s Play Store/App Store (e.g., SBI e₹-R, ICICI e₹).
2. Register: Link your bank account, verify via OTP (no extra KYC if account-based).
3. Load Wallet: Transfer funds from your bank (24/7, via UPI/IMPS).
4. Transact:
• P2P: Enter recipient’s mobile number or scan QR.
• P2M: Scan merchant’s CBDC or UPI QR; pay offline via NFC if supported.
5. Offline Mode: Device-to-device transfer without internet (proximity-based).
6. Redeem: Transfer unused balance back to bank instantly.
No minimum balance required; supports all denominations for familiarity.
Limits and Denominations
• Denominations: Same as physical rupees (₹1 to ₹2,000) for ease of use.
• Transaction Limits: No fixed upper limits specified; governed by bank policies and pilot rules (e.g., daily caps similar to UPI, up to ₹1 lakh). Supports any amount up to two decimals.
• Wallet Balance: No interest; balances are like cash holdings.
Security Measures
e₹ employs a robust cybersecurity framework with end-to-end encryption, device binding, and multi-factor authentication (e.g., biometrics, PIN). If a device is lost, funds are recoverable using the same phone number/SIM on a new device—no risk of permanent loss. RBI mandates regular audits, fraud monitoring, and compliance with global CBDC standards. Programmability adds controls to prevent misuse.
Interoperability
e₹ integrates seamlessly with UPI: Scan a UPI QR to pay, and settlement occurs via UPI rails (instant). It differs from UPI (which is a payment instruction system) as e₹ is actual currency. Future expansions may link with other systems like NEFT/RTGS for broader adoption.
Benefits and Risks
• Benefits:
• Efficiency: Instant settlements, reduced logistics costs (no printing/transport for cash).
• Inclusion: Offline access aids unbanked/rural users; programmability ensures targeted aid (e.g., vouchers for education).
• Wholesale Gains: Lower counterparty risks, faster cross-border potential.
• Sustainability: Digital form cuts paper usage.
• Risks (Addressed in Pilots):
• Cybersecurity threats: Mitigated via advanced tech.
• Adoption barriers: Low in pilots; education campaigns ongoing.
• Monetary policy impacts: RBI monitors to avoid bank disintermediation.
Current Status (as of November 29, 2025)
Pilots continue without full-scale rollout, with RBI focusing on refinements like enhanced offline programmability and cross-border linkages (e.g., via G20 discussions). Transaction volumes reached ₹18,120 crore in FY 2024-25, per government data. For participation, check RBI’s website or your bank’s app. Future phases may include more banks and features like wearables integration. For the latest, visit RBI’s e₹ FAQs.