In a significant move to bridge the digital divide, the Reserve Bank of India (RBI) has announced plans to deploy offline solutions to facilitate the widespread adoption of its Central Bank Digital Currency (CBDC), known as the digital rupee, especially in rural and remote regions. RBI Governor, Shaktikanta Das, emphasized the initiative’s goal to ensure the digital currency’s accessibility in areas with scant internet connectivity, during a Monetary Policy Committee review meeting held on February 8.
The RBI’s strategy includes evaluating both proximity and non-proximity-based solutions across diverse environments—rural, urban, and hilly—to enhance the digital rupee’s usability without relying on internet access. This approach marks a pivotal step towards financial inclusion, enabling transactions in underserved areas through the introduction of offline functionality in the digital rupee’s ecosystem. The central bank’s pilot projects will gradually introduce these features, focusing on person-to-person (P2P) and person-to-merchant (P2M) transactions via digital wallets.
This initiative builds on previous discussions about the CBDC’s potential in streamlining cross-border transactions and its integration with international financial systems, as outlined by Ajay Kumar Choudhary, RBI’s executive director, in March 2023. Although India already boasts popular payment platforms like the Unified Payments Interface (UPI) with offline capabilities, the introduction of the digital rupee aims to further the government’s objective of reducing cash circulation and enhancing monetary oversight.
Since its pilot launch in December 2022, the digital rupee has shown promising results, achieving one million daily transactions by December 2023. This move not only aligns with global trends towards digital currencies aimed at ensuring financial stability and improving cross-border payments but also underscores India’s commitment to increasing financial inclusion through technological innovation.