The Digital Rupee — officially the e₹ or e-Rupee — is India's Central Bank Digital Currency (CBDC). It is legal tender issued directly by the Reserve Bank of India (RBI) in digital form, fully equivalent in value to physical currency on a 1:1 basis. It is not a cryptocurrency; it carries no interest and is regulated entirely by the RBI.

The RBI launched two variants: a Wholesale CBDC (e₹-W) for interbank settlements and financial institutions, and a Retail CBDC (e₹-R) for everyday consumer and merchant transactions. Both are currently in extended pilot mode.

• The wholesale pilot launched on 1 November 2022; the retail pilot on 1 December 2022, starting with 9 banks in select cities.
• As of March 2025, the retail pilot covers 17 banks and roughly 60 lakh users, growing to 70 lakh by September 2025.
• The RBI has permitted certain non-bank entities to offer e₹ wallets, widening reach beyond the banking network.
• Wholesale CBDC scope was expanded to include four standalone primary dealers, enabling use in government securities trading and interbank markets.
• Person-to-person (P2P) and person-to-merchant (P2M) transactions are live. UPI interoperability has been enabled by participating banks including SBI.
• Retail e₹ circulation fell to ₹771 crore by March 2026 from ₹1,016 crore a year earlier, suggesting that usage has not yet scaled to the pace of wallet additions.

• Retail payments — everyday P2P transfers and merchant payments via e₹ wallets on participating bank apps.
• Government subsidies — food subsidies under the Public Distribution System (PDS) were delivered via programmable e₹ to beneficiaries in Gujarat, Puducherry and Chandigarh, redeemable only at fair price shops and identified merchants.
• Direct Benefit Transfers (DBT) — multiple central and state agencies ran CBDC pilots to programme welfare disbursals so funds could only be used for stated purposes.
• Wholesale settlements — government securities transactions and interbank settlements, with primary dealers now also included.
• Corporate use cases — the programmability feature allows companies to ring-fence funds for specific purposes such as business travel expenses.

• Programmability — money can be restricted to specific uses, locations or time windows. This is the most distinctive feature of CBDC, impossible with ordinary currency.
• Financial inclusion — offline functionality is being tested for areas with poor internet, covering hilly, rural and urban fringe locations using both proximity and non-proximity solutions.
• Reduced cash costs — the RBI sees CBDC as a way to cut cash handling, printing and distribution costs over time.
• Fraud reduction and transparency — programmable and traceable transactions help reduce leakage in welfare delivery.
• Cross-border potential — as the world's largest remittance recipient, India has a strong interest in using e₹ to make overseas transfers faster, cheaper and more transparent.

The RBI's 2025-26 Annual Report and the Governor's statements lay out the direction clearly.

RBI is scaling e₹ to cross-border corridors, offline payments, programmable welfare and non-bank wallets — building on the core pilot to make the Digital Rupee globally relevant.

The honest picture is mixed. Growth in wallet numbers has been strong — from near zero in late 2022 to 70 lakh users by mid-2025 — but actual usage has not kept pace. Circulation value fell from ₹1,016 crore in March 2025 to ₹771 crore in March 2026, suggesting many users have wallets they rarely use.

This mirrors a challenge seen in CBDC programmes globally: getting people to open wallets is easier than getting them to transact regularly, especially when UPI is already fast, free and deeply familiar. The 334% rise in circulation value during 2024-25 was a genuine milestone, but it came off a low base.

Where the Digital Rupee has performed well is in programmable welfare delivery — the subsidy pilots in Gujarat, Puducherry and Chandigarh are genuine use cases that UPI alone cannot replicate. This is where the e₹ is carving out a distinct role.