The e-rupee is like wine: It'll take time to mature

India's CBDC has seen very little adoption in its ongoing trial phase, but then we already have a digital-money success in UPI. The e-rupee's edge is subtle and it's best not to rush it

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The slow uptake of the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) at the retail level is not surprising. Despite the involvement of 13 participating banks, daily transactions in this digital form of fiat money are reportedly only in the range of 10,000-12,000, though 3.5 million merchants and 1 million customers were selected for RBI’s nearly-year-old pilot project across 13 cities. Of course, it is entirely possible, and indeed likely, that lack of awareness is a factor. But for the retail user, there is nothing that a CBDC brings to the table that the Unified Payments Interface (UPI) does not. With its ease of transacting, relative safety, low cost and ability to function even via feature phones, UPI has revolutionized the way that transactions—especially small-ticket ones—are done in India. Inclusion of online aggregators and shopping apps as part of the CBDC eco- system could improve the e-rupee’s appeal, but it is unclear if this will suffice to overcome UPI’s first-mover advantage. Indeed, the scorching pace at w