RBI's e-rupee could use UPI for areformist leap

While UPI is in the spotlight for good reason, its link-up with India's CBDC is more exciting for what it may soon come to enable in terms of a banking sector rehaul aimed at efficiency

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India’s G20 presidency has gone along with UPI advocacy. August saw over 10 billion online transfers of money done via the Unified Payments Interface (UPI), a figure big enough to make dignitaries from even large economies sit up. Run by an entity called National Payments Corporation of India that’s owned by a mix of lenders, the UPI platform itself sits atop the state-run Aadhaar system of biometric IDs—which helps by cross verifying the identities of bank and telecom users—as the star of our ‘India Stack’ success. Once the privacy risks of a data sprawl are taken care of, the very ease of a handset acting as an aim-and-pay device by moving money among banks at the swipe of a thumb makes the UPI idea worthy of the spotlight it’s now in. This week, the Reserve Bank of India (RBI) okayed UPI as a platform for banks to extend credit lines, too, thus expanding its scope. Far more exciting, though, was Monday’s news of State Bank of India linking UPI with e-rupee wallets issued for people to hold RBI’s central bank digital currency (CBDC). In w