After five months since the launch of central bank digital currency – retail (CBDC – retail) popularly referred to as e-Rupee retail, the retail digital currency in circulation stood at a meagre ₹5.7 crore, according to the Reserve Bank of India’s annual report for FY23.

The total e-Rupee wholesale in circulation stood at ₹10.69 crore as on March 31, 2023. Together, the digital currencies account for ₹16.39 crore, which is not even 0.0001 per cent of the total bank notes in circulation.

Both digital currencies are presently in the test or pilot phases. E-Rupee wholesale was launched on November 1, 2022 and the e-Rupee retail a month later. While the wholesale digital currency is right now limited to settlement of secondary market transactions in government securities or G-Secs, the retail digital currency is available for widespread use just like physical cash. However, only four banks – YES Bank, IDFC First Bank, ICICI Bank and State Bank of India have been roped in for the first phase of piloting the e-Rupee retail.

“During 2023-24, the Reserve Bank aims at expanding the ongoing pilots in CBDC-Retail and CBDC-Wholesale by incorporating various use cases and features. The pilot in CBDC-Retail is proposed to be expanded to more locations and to include more participating banks,” according to RBI’s annual report for FY23.

Too few to count

Interestingly, ₹500 denomination e-Rupee retail currency accounts for the maximum transacted denomination in value terms (47.5 per cent share), ₹1 denomination is the popular choice based on volume of denominations transacted (22.2 per cent share) as per the RBI report (see table).

Denomination Volume (in lakhs)Share (%)Value (in Rs crore)Share (%)

Bank officials say that active piloting has gathered momentum only since February and there is still resistance among customers to adopt digital currency. “The use cases are quite restricted and hence people often say they don’t want another digital payment app parked on their mobiles,” said a senior official of a private bank. “I think we still need to communicate more with people to make them understand how e-Rupee retail and UPI are two different things and can be used simultaneously. Some tech-savvy customers understand this, but not all,” said a senior executive of another private bank.

Also, banks say that while there are still some bugs in the system, it’s difficult to test and overhaul them without having a critical mass. “It’s a chicken and egg kind of situation,” a banker explained stating that unless volumes significantly increase debugging could get challenging. But for volumes to increase, the bugs have to be addressed so that we win the customers’ confidence. Most bankers feel that extending the e-Rupee retail pilot to more banks could take at least six months, though the use cases may increase soon.