RBI’s Digital Rupee can be used for offline transactions. Key details here

The Reserve Bank of India (RBI) has proposed additional use cases for Central Bank Digital Currency (CBDC) pilot projects. The CBDC Retail (CBDC-R) pilot currently enables Person to Person (P2P) and Person to Merchant (P2M) transactions using Digital Rupee wallets provided by pilot banks. The new addition will permit users like government agencies to ensure that payments are made for defined benefits. Besides, corporates can also used to for specified expenditures like business travel for their employees. Additional features like validity period or geographical areas within which CDBC may be used can also be programmed.

"It is now proposed to enable additional use cases using programmability and offline functionality. Programmability will permit users like, for instance, government agencies to ensure that payments are made for defined benefits. Similarly, corporates will be able to program specified expenditures like business travel for their employees," said RBI Governor Shaktikanta Das said while announcing the policy decision.

The RBI also proposed to introduce an offline functionality in CBDC-R for enabling transactions in areas with poor or limited internet connectivity. Multiple offline solutions (proximity and non-proximity based) across hilly areas, rural and urban locations will be tested for this purpose. These functionalities will be introduced through the pilots in a gradual manner.

In the past, the central bank initiated a pilot project for wholesale CBDC with nine banks, and a retail version of CBDC or e-rupee was launched on December 1, 2022. The nine selected banks were -- State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank, and HSBC.

It is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries, i.e. banks. Users are able to transact with e-rupee through a digital wallet offered by the participating banks.

Last month, Union Finance Minister Nirmala Sitharaman said the Centre and RBI are actively engaged in improving the central bank digital currency (CBDC) so that it can be used for cross-border payments.