As per some credible sources, usage of India's digital currency - the e-rupee - has slumped to just a tenth of the peak hit in December. This reflects on the struggles that several countries have already experienced in trying to generate public support for digital currencies.
Devised as a digital alternative to physical cash, in December 2022, the Reserve Bank of India started a pilot for the e-rupee. And by December 2023 successfully, it reached a target of 1 million retail transactions per day. The achievement came only after banks were asked to push up transactions by offering incentives to retail users and disbursing a portion of bank employees' salaries using the e-rupee.
However, daily transaction numbers have fallen to about 100,000 as that the push has diminished now. This was told by two of the sources who are directly involved. The banker who is involved in the project also stated that this shows there is little organic demand to use the e-rupee.
However, the sources declined to be identified because they are not allowed to speak with the media. Furthermore, the Reserve Bank of India did not respond to an email seeking comment and the data on retail transactions via the e-rupee is not publicly disclosed as of yet. All four of the sources who are involved cited that the the transactions that are continuing are in part due to banks disbursing benefits to their employees via the e-rupee.
WIth this, it has helped to push up transactions to about 250,000 to 300,000 per day, towards the end of each month, said two of the sources. The RBI had also asked banks to boost transactions to at least 1 million per day by late 2023. This was said as RBI wanted to "test the system's resilience at scale." Nonetheless, that push has now stopped, said the second of the two sources.
Currently, the RBI is not planning to rapidly expand the pilot and the current focus is on testing the technology and developing use cases for the digital currency, the source said. And if we look at the global front, among 86 central banks surveyed by the Bank of International Settlements, a third are running a pilot for a Central Bank Digital Currency (CBDC). "Adoption should grow as more use cases develop," the source added.
