Reserve Bank of India expands digital rupee pilot

The Reserve Bank of India (RBI) has expanded its Central Bank Digital Currency (CBDC) pilot program to include two additional federally administered territories: Chandigarh and Dadra and Nagar Haveli. This expansion follows previous testing in Puducherry and Gujarat.

The initiative focuses on using the digital rupee (e₹-R) for direct-benefit transfers to welfare beneficiaries. By utilizing programmable features, the government can encode specific spending rules directly into the currency. This mechanism allows recipients to purchase specific goods, such as foodgrains, from recognized merchants, which aims to reduce corruption and leakage within India’s large subsidy ecosystem.

Since its initial retail launch in December 2022, the digital rupee pilot has grown significantly. Current retail circulation is estimated at approximately ₹771 crore (about $92 million). Future plans for the digital rupee include its deployment for pension disbursements and farmer income support programs.