The State Bank of India (SBI), the country’s leading public sector bank, has now integrated UPI (Unified Payments Interface) with the Digital Rupee, which is India’s Central Bank Digital Currency (CBDC).
Currently, UPI boasts of 300 million users, with an additional 500 million merchants using the platform to receive payments for their services across India.
This initiative aims to amplify the ease and reach of digital transactions for the bank’s patrons.
With the ‘eRupee by SBI’ app, users can seamlessly combine their Digital Rupee assets with UPI. This means they can swiftly scan UPI QR codes of merchants, ensuring secure transactions, as per the bank’s official statement.
It’s worth noting that this major bank was a participant in the Reserve Bank of India’s (RBI) retail digital e-rupee initiative back in December 2022.
Digital Rupee’s Integration with Widely Used UPI System
The seamless fusion of CBDC with the widely adopted UPI is a significant achievement, paving the way for increased utilization of the national digital currency in daily transactions.
A recent economic report indicates that UPI was responsible for a whopping 52 percent of the total 8.84 billion online financial transactions conducted during the 2022 fiscal year.
SBI is optimistic that this amalgamation will bolster the digital currency landscape, echoing India’s steady march towards a digital-first economy.
This move to integrate UPI with the Digital Rupee resonates with the soaring reputation and adoption of the UPI payment method, which empowers users to execute instant transactions through a Virtual Payment Address (VPA).
Indian Government Rolls Out Digital Rupee to Compete with Crypto
The Reserve Bank of India unveiled the Digital Rupee on December 1, 2022, as an experimental initiative.
Although the present administration has been advocating for the adoption of the digital rupee, it hasn’t exhibited a favorable stance towards other cryptocurrencies.
The rollout of the digital rupee is perceived by many as an effort to counteract the rise of decentralized cryptocurrencies like bitcoin.
Much like China’s digital yuan, the digital rupee is akin to tangible cash but carries the advantage of being convertible into other monetary forms, such as bank deposits.
At this moment, India lacks specific regulations addressing cryptocurrencies. In a previous move, the central bank had disseminated a directive urging all Indian banks to refrain from facilitating crypto transactions. However, this decision was subsequently reversed by the Supreme Court of India.
