CBDC Goes Mainstream, Reliance Retail To Accept Digital Currency At Stores

In a major push to the Reserve Bank of India’s (RBI’s) ambitious Central Bank Digital Currency (CBDC) project, Reliance Retail has begun accepting the digital currency for payments at its stores. 

The company has partnered with ICICI Bank, Kotak Mahindra Bank and fintech startup Innoviti Technologies to deploy the infrastructure for accepting eRupee. In essence, customers will now be able to check out with CBDC-enabled QR codes at Reliance Retail stores.

With this, Reliance Retail has become the first major Indian conglomerate to adopt the pilot digital payments initiative at its retail properties.

“This historic initiative of pioneering the digital currency acceptance at our stores is in line with the company’s strategic vision of offering the power of choice to Indian consumers…With more Indians willing to transact digitally, this initiative will help us provide yet another efficient and secure alternative payment method to customers at our stores,” said Reliance Retail Director V Subramaniam.

In a statement, the company said that it has already rolled out the feature at its gourmet stores Freshpik and will expand the service across all its properties eventually. 

Close on the heels of the development, Kotak Mahindra Bank also announced that it has rolled out the CBDC feature to a close group of users, including retail consumers and businesses. 

At the beginning, Kotak Mahindra Bank will launch the pilot in Mumbai, Delhi and Ahmedabad only for Android users. 

Reacting to the announcement, Deepak Sharma, president and chief digital officer at Kotak Mahindra Bank, said, “We are delighted to be a part of RBI’s initial pilot of digital rupee. CBDC aligns with the RBI’s vision of developing a digitally powered economy, promoting digital transactions, and reducing dependency on cash…Digital rupee will give a huge fillip to the Government of India’s vision of Digital India and CBDC will act as a change agent for the finance ecosystem in the country.”

The announcement comes days after payments solutions startup Infibeam Avenues announced that its payments gateway arm CCAvenue has become the first such player in the country to process retail CBDC transactions. 

CBDC Picks Up Pace

The announcement comes at a time when the RBI has pulled up all stops to spur adoption of the CBDC in the country. Beginning with a wholesale pilot in November, the central bank expanded the scope of the digital currency to include retail users in December.

The RBI has so far onboarded nine banks to run the wholesale and retail pilots, including State Bank of India, ICICI Bank, Yes Bank, IDFC First Bank, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. 

Through the CBDC, the RBI and the government aim to reduce the cash in circulation and save on operations costs related with managing cash as well as to promote financial inclusion across the country. 

While the CBDC did not find a mention in this year’s Budget, the Economic Survey 2022-23, released a day prior, noted that the RBI is looking to expand the scope of the CBDC pilots in a staggered manner. From adding more banks to rolling out the feature to more users across different locations, the Survey said that the service would be scaled up based on feedback received during the trial run. 

It also said that the government-backed digital currency has the potential of laying the groundwork for another generation of financial innovations.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.