UPI Already Enables Whopping 2,347 Transactions Per Second
e₹ is set to take things to the next level, revolutionizing the country’s financial landscape, writes CARLIN CRASTO
India took a major leap forward in digital payments with the launch of its Digital Rupee, also known as the Digital Rupee (e₹) or eINR or E-Rupee, in 2022. This electronic version of the physical rupee is backed by blockchain technology and represents a new era of secure and government-supported digital currency.
With the rise of technology and the increasing popularity of digital payments, the Digital Rupee is a significant step forward in the evolution of India’s financial system. As the country’s economy continues to grow, it is essential to have a secure and accessible alternative to traditional methods of transactions like cash, cheques, and cards.
The future of currency
Digital payments have already shown great promise, with the United Payments Interface (UPI) enabling some 7,404.45 crore transactions in 2022—that’s 2,347 transactions per second. The total transaction value reached Rs 125.95 lakh crore, a 1.75x increase compared to the previous year. Moreover, India’s adoption of central bank digital currencies (CBDCs) is part of a global trend, with 105 nations exploring CBDCs of their own.
CBDCs can be classified into two broad types. The first is a wholesale CBDC effort, known as CBDC-W (designed for restricted access to select financial institutions), which began on November 1st with the participation of nine banks.
The other is a retail CBDC pilot, known as CBDC-R, which launched on December 1st in four cities – Mumbai, New Delhi, Bengaluru, and Bhubaneswar. It would be potentially available for use by all, including the private sector, non-financial consumers, and businesses. The initial participants in the CBDC-R pilot were four banks, including the State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank.
The Digital Rupee offers a range of benefits for both individuals and businesses. It allows for instant transfers, payments, and transactions with complete transparency while reducing the risk of fraud and counterfeiting. The digital currency can be easily stored in a digital wallet, which can be accessed from anywhere in the world with an internet connection. Transactions conducted using the Digital Rupee are encrypted and stored on the blockchain, making them secure from hacking and fraud.
One of the key benefits of the Digital Rupee is that it enables the government to monitor financial transactions more effectively, reducing the scope for black money and other illegal activities. Additionally, it will help to expand financial inclusion by making digital payments accessible to the unbanked population of the country.
For the common man
Central Bank Digital Currencies (CBDCs) have the potential to revolutionize the way people conduct financial transactions, offering numerous benefits over traditional methods. Here are some ways in which CBDCs will impact and benefit common citizens:
- Efficient Money Transfers and Faster Settlements: CBDCs provide real-time settlements, eliminating intermediaries and reducing delays. CBDC-based remittances are quicker and cheaper, reducing costs for users.
- Lower Transaction Costs: CBDCs have lower transaction costs than traditional methods, saving users money, especially with international transfers.
- 24×7 Availability of Transfer and Remittance Services: CBDCs are available round-the-clock, providing users with easy access to transfer and remittance services anytime, anywhere.
- Avoidance of Carrying and Storage of Physical Cash: With CBDCs, users can store their digital currencies securely and make transactions digitally, eliminating the need to carry and store physical cash.
- Elimination of Soiled and Damaged Notes: CBDCs are digital, so they do not face the same wear and tear as paper currency, eliminating the problem of soiled and damaged notes for users.
New era
Overall, the launch of the Digital Rupee is a game-changing move toward a more technologically advanced, secure, and inclusive financial system in India. As the e-rupee rollout continues, we should see more action in the digital payments space and blockchain solutions. Developers and financial service organizations will be buzzing as the adoption of the Indian CBDC becomes further widespread.
e₹ is set to take things to the next level, revolutionizing the country’s financial landscape and providing an essential foundation for its continued economic growth. (The author is Lead Solutions Architect, at Mobileware Technologies).
