The Reserve Bank of India announced on Wednesday the phased launch of the Central Bank Digital Currency (CBDC) 2.0—an upgraded version of the digital rupee with major new features including offline transaction capability, programmable money for government transfers, and interoperability with UPI.
The digital rupee, piloted since 2022, now enters its mass adoption phase. The offline feature allows transactions in areas without internet connectivity using NFC-enabled devices and smartcards—a critical inclusion for rural India where 400 million people have limited internet access.
The programmable money feature will initially be used for government welfare payments, enabling conditions on spending: for example, digital vouchers for fertilisers that can only be spent at certified agricultural input retailers, eliminating diversions and ensuring the benefit reaches its intended purpose.
RBI Deputy Governor T. Rabi Sankar called it ‘the most transformative step in India’s financial infrastructure since UPI.’ The central bank aims to have 50 million users on the digital rupee platform by March 2027, up from the current 5 million in the pilot phase.
Fifteen banks, including SBI, HDFC Bank, Axis Bank, and Kotak Mahindra Bank, will onboard customers through dedicated digital rupee wallets integrated with their existing mobile banking apps. No interest will be paid on digital rupee holdings, consistent with its nature as currency rather than a deposit.
India’s digital rupee initiative places it among the most advanced CBDC programmes globally, alongside China’s e-CNY and the EU’s digital euro project. The government sees the CBDC as a key tool to reduce cash handling costs, improve tax compliance, and extend financial services to the unbanked.
