The Reserve Bank of India's Central Bank Digital Currency pilot, branded as the e-rupee or e₹, has crossed a significant milestone with 50 lakh daily active users as of February 2026. Launched initially as a limited pilot in December 2022 with four banks and a few thousand users, the retail digital rupee is now available through wallets offered by 15 banks and has been integrated with the UPI QR code infrastructure, allowing e-rupee payments at any UPI-enabled merchant.
How the e-Rupee Works
The e-rupee is a tokenised form of the Indian rupee issued directly by the RBI. Unlike the balance in your bank account, which is a liability of the commercial bank, the e-rupee is a direct liability of the central bank, making it as safe as physical cash but in digital form. Users download an e-rupee wallet from their participating bank, load it with funds from their bank account, and can then use the balance for payments.
There are two forms of the e-rupee currently in circulation. The retail e-rupee, or e₹-R, is designed for the general public and functions as a digital equivalent of cash for everyday transactions. The wholesale e-rupee, or e₹-W, is used for interbank settlements and large-value transactions between financial institutions. The retail segment has driven the user growth to 50 lakh daily users, while the wholesale segment has been used in government securities settlement trials.
What You Can Do With It Today
As of February 2026, the practical use cases for e₹-R have expanded considerably from the early pilot phase. You can use it to make payments at any merchant that accepts UPI QR codes, thanks to the interoperability integration completed by NPCI in mid-2025. You can transfer e-rupees to another e-rupee wallet holder. Utility bill payments, mobile recharges, and online purchases at select merchants are also supported.
A notable feature is programmability. The government has begun experimenting with programmable e-rupee disbursements for specific welfare schemes, where the tokens can only be spent on designated categories such as agricultural inputs or educational materials. This represents a significant governance innovation, ensuring that subsidies reach their intended purpose. Pilot programmes in three states have distributed approximately 800 crore rupees in programmable e-rupee tokens for fertiliser subsidies.
What It Cannot Do Yet
The e-rupee ecosystem still has meaningful limitations. Interest cannot be earned on e-rupee holdings, unlike a savings account balance. The offline payment capability, which would allow e-rupee transactions without internet connectivity, is still in a limited trial phase with approximately 2 lakh users in select rural districts. Smart contract functionality, where payments automatically trigger upon meeting pre-defined conditions, remains in the conceptual stage for retail applications. Cross-border e-rupee transfers are not yet available, though the RBI has signed bilateral exploration agreements with the central banks of the UAE, Singapore, and the UK.
Transaction limits are also relatively restrictive. Individual e-rupee wallets are currently capped at 2 lakh rupees, with daily transaction limits of 50,000 rupees. These limits are expected to be revised upwards as the pilot matures and the RBI gains confidence in the operational resilience of the system.
Should You Start Using It
For most individuals, the e-rupee does not yet offer a compelling reason to switch from existing UPI-based payments, which are already instant, free, and widely accepted. The primary advantage of the e-rupee over UPI is that it is a direct central bank instrument, which means it carries zero counterparty risk. In practice, however, this distinction matters more for institutional and wholesale users than for individuals buying groceries.
That said, the e-rupee is worth experimenting with if your bank offers it. Loading a small amount into an e-rupee wallet and using it for a few transactions gives you first-hand experience with what may eventually become a significant component of India's monetary infrastructure. The RBI has indicated that it plans to make the e-rupee a permanent feature of the Indian financial system by FY28, so early familiarity could prove useful.
Source
RBI Annual Report on Digital Currency Pilot, February 2026