October 20, 2025

By Anjali Kochhar

India is steadily advancing toward the full-scale introduction of its Central Bank Digital Currency (CBDC), also known as the e-rupee (e₹), marking a major transformation in the country’s financial infrastructure. Envisioned as a blockchain-powered, central bank-backed digital currency, the e₹ aims to simplify transactions, reduce paper-based currency usage, and enable faster, traceable payments compared to traditional banking systems.

The Reserve Bank of India (RBI) launched pilot programs for the CBDC in both wholesale and retail sectors, and the project has already expanded impressively. As of March 2025, the pilot spans more than 15 major banks and reaches millions of users, with ₹1,016 crore in e-rupee recorded in circulation. This rapid adoption highlights India’s readiness to embrace a digital currency framework that aligns with its broader digital transformation and financial inclusion goals.

For consumers and businesses, the e₹ offers practical advantages such as 24×7 settlement, cash-like finality, and instant wallet-to-wallet transfers that do not rely on banking hours. Its built-in programmability allows for purpose-restricted payments, useful for government subsidies, grants, and welfare disbursals, while maintaining robust audit trails to support anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.

“The value is practical as there is 24×7 settlement, cash-like finality, and wallet-to-wallet transfers that don’t rely on banking hours. For compliance, programmability (e.g., purpose-restricted disbursals) and traceable audit trails strengthen AML/CFT without sacrificing payment speed,” said Vikram Subburaj, CEO of Giottus Crypto Platform. He added that e₹ wallets’ ability to scan either CBDC or UPI QR codes “allows a low-friction bridge to existing merchant rails,” ensuring smooth integration with India’s well-established digital payment infrastructure.

The e₹ system runs on a Distributed Ledger Technology (DLT)-based platform rather than a public blockchain, which enhances transparency while maintaining security and regulatory oversight. Unlike account-based systems, transactions on this platform can be tracked in real-time without exposing user privacy. According to Subburaj, if the RBI continues to expand offline capabilities and retail use-cases, “e₹ can complement UPI by handling instant, final settlement for targeted payments. This will bring added efficiency for the state, lower leakage in subsidy flows, and deliver a simpler, faster experience for everyday users.”

From a macroeconomic standpoint, India’s CBDC project is being hailed as a game-changing leap in the evolution of the nation’s financial ecosystem. Experts believe that by harnessing blockchain technology, India is building not just a digital currency, but a framework for greater responsibility, visibility, and accountability within its monetary system.

“India’s future Central Bank Digital Currency (CBDC) is a game-changing leap forward in the history of the nation’s financial development,” said Siddharth Ugrankar, CEO and Founder of Qila.io. “By harnessing blockchain power, it introduces not only digital efficacy but also responsibility and clear visibility to the core of the money system.”

Ugrankar emphasised that the shift from paper-based to programmable money represents more than just technological progress. It marks a fundamental change in how financial value is created, managed, and monitored. “The transition from paper to programmable currency will facilitate accelerated settlements, reduce fraud to the barest minimum, and allow hitherto unprecedented traceability in transactions, all within the framework of regulatory compliance,” he added.

According to Ugrankar, this transformation goes beyond development. It reflects India’s determination “to future-proof its economy, enabling both the institutions and the citizenry to transact with trust, accuracy, and inclusiveness in a digitally autonomous ecosystem.”

The momentum surrounding the CBDC has also drawn attention from the broader crypto and blockchain community. Experts believe that CBDCs could serve as a gateway for Indians to engage safely with blockchain technology within a regulated framework, potentially accelerating innovation across financial and technological sectors.

“India’s move towards a central bank-backed digital currency is a significant step for the country’s digital economy,” said Edul Patel, CEO of Mudrex. “Beyond simplifying transactions, CBDCs serve as a bridge to the broader crypto and blockchain ecosystem, helping users become familiar with blockchain technology in a regulated environment.”

Patel added that recent remarks from the Finance Minister regarding the government’s engagement with digital assets indicate that the e₹ could be only the beginning of India’s blockchain journey. “This momentum is likely to encourage more entrepreneurs to build innovative solutions on blockchain, expand markets, and develop offerings that address real-world problems, ultimately driving both financial inclusion and technological growth,” he said.

The potential implications of India’s CBDC extend far beyond just convenience and efficiency. A well-implemented e₹ could help reduce leakage in subsidy programs, enhance monetary policy transmission, and provide a faster, safer medium for interbank settlements. Furthermore, its integration with the country’s robust Unified Payments Interface (UPI) network could strengthen India’s position as a global leader in digital payments.

As India prepares to expand the CBDC’s retail reach and explore offline transaction capabilities, it positions itself at the forefront of digital currency innovation. By blending technological sophistication, regulatory oversight, and user-friendly accessibility, the e₹ initiative showcases India’s vision for a transparent, efficient, and inclusive digital economy.

If executed successfully, the central bank-backed digital currency could redefine how money moves within the country, ushering in a future where financial systems are faster, cleaner, and more transparent, reinforcing India’s standing as a global fintech powerhouse.

About the author

Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.