India, which launched its Central Bank Digital Currency (CBDC) pilot for the retail sector on December 1, is planning to make low-value digital rupee transactions anonymous to make them equivalent to cash, media reports said, based on unnamed sources. The digital rupee for retail has been launched within closed groups of banks and merchants in select cities.
As per the information available, the digital rupee for retail has so far clocked 160,000 transactions worth Rs 64 lakh (approximately $80,000) by 16,000 users. The Reserve Bank of India (RBI) plans to bring changes in its digital rupee system for retail use based on experiences gained during the ongoing pilot.
One of the changes on the policymakers’ radar is removing the digital footprints in low-value transactions to ensure the digital rupee offers the same degree of privacy and anonymity as the cash. Any such changes would require legal and technical interventions.
While the need for such changes in India’s retail CBDC is being felt in relevant circles, sources claim that RBI and Finance Ministry officials feel that the user volume of the digital rupee should reach a critical mass before any such change is implemented.
They expect the number of retail users to touch the 50,000 mark by the end of January, and 1.5 million to 2.5 million in five months. It’s then that the decision on providing anonymity to low-value retail digital rupee transactions could be implemented.
