Digital Rupee: RBI's New Money Is Growing Fast

The Digital Rupee, India's central bank digital currency, is gradually gaining traction as part of the Reserve Bank of India's push toward modernising payments. The CBDC seeks to enhance current digital systems and provide a safe substitute for cash with features including offline capability and programmable payments. Launched to offer a secure, regulated alternative to cryptocurrencies, the CBDC is now being actively explored for use in cross-border transactions, the RBI said in its annual report.

The CBDC-R pilot now covers 6 million users across 17 banks, with offline and programmable payment features. RBI is also exploring cross-border use.

What is the Digital Rupee

The Digital Rupee, or e₹, is India's Central Bank Digital Currency (CBDC), a digital version of the Indian rupee issued by the Reserve Bank of India. It is designed to work similarly to physical currency but in a digital format, offering transactions the same degree of simplicity and confidence.

How It Has Grown

Since its pilot launch, the Digital Rupee's circulation has grown considerably. As per the RBI's annual report, it was Rs 16.39 crore in March 2023, rose to Rs 234 crore in March 2024, and then reached Rs 1,016 crore in March 2025.

Key Features of the Digital Rupee

The Reserve Bank of India issues the Digital Rupee, which functions similarly to actual cash but in digital form. It comes in two varieties: e₹-W, which is used for wholesale transactions between banks and e₹-R, which is utilised for retail applications by the general public. Its features include programmable payments that can be programmed for certain purposes such as subsidies, and offline payments, which might be helpful in places with poor internet connectivity.

How Digital Rupee Is Different from UPI and Cryptocurrency

The Reserve Bank of India is the issuer of the Digital Rupee (e₹), a digital currency created by the central bank that serves as electronic legal tender. Unlike UPI (Unified Payments Interface), a payment system that enables fund transfers between bank accounts using existing money, the Digital Rupee is an actual form of currency. Once issued, it is stored in digital wallets and can be used for payments without involving banks, making it closer to digital cash.

While cryptocurrencies, such as Bitcoin, are decentralised, not backed by a government or central bank, and their value fluctuates dramatically. The Digital Rupee offers more stability and trust because it is centralised, fully controlled, and keeps a constant value that is equivalent to the physical rupee. Cryptocurrencies and the Digital Rupee are both digital in nature, but they differ greatly in terms of their structure, function and legal tender. It can also be used as a substitute for private cryptocurrencies like Bitcoin, which lack institutional support and are not regarded as legal money.