The Reserve Bank of India's Central Bank Digital Currency (CBDC) pilot for the retail digital rupee (e-Rupee) has reached a significant adoption milestone, processing over 50 lakh daily transactions as of December 2025. The RBI has simultaneously expanded the pilot from 15 to 30 participating banks and introduced new features including offline payments, programmable tokens, and cross-border remittance capabilities.
How the Digital Rupee Works
The e-Rupee is a tokenised form of the Indian rupee issued directly by the RBI. Unlike UPI, which is a payment system that moves money between bank accounts, the digital rupee is actual currency in digital form, equivalent to holding physical cash but in your phone's digital wallet. Each e-Rupee token is a direct liability of the RBI, just like a currency note, making it the safest form of digital money possible.
Users access e-Rupee through their participating bank's mobile app. Transactions work via QR codes, similar to UPI, but settlement is instant and final since no interbank clearing is required. The bank merely acts as a wallet provider; the money itself is a direct claim on the central bank.
New Features in the Expanded Pilot
The offline payment capability is the most practically significant addition. Users can now make e-Rupee payments without internet connectivity, using NFC (near-field communication) between devices. Transactions up to 500 rupees can be completed offline and are reconciled when the device next connects to the internet. This is particularly important for financial inclusion in rural areas with intermittent connectivity.
Programmable tokens allow the government to issue purpose-specific digital rupees. For example, agricultural subsidies can be disbursed as e-Rupee tokens that can only be spent on seeds, fertilisers, or farming equipment. This programmability has drawn significant interest from state governments for welfare programme implementation.
Will e-Rupee Replace UPI?
The RBI has clarified that e-Rupee is not a replacement for UPI but a complementary system. UPI excels at high-volume, high-value transactions across the entire banking system. The e-Rupee is designed for use cases where cash-like properties are valuable: offline payments, privacy-preserving small transactions, direct government transfers, and potentially cross-border remittances. The coexistence of both systems is the intended long-term architecture.
Source
RBI CBDC Pilot Status Report, December 2025