A Study on Progress and Impacts of Central Bank Digital Currency (CBDC) In India-A New Digital Financial Inclusions

Abstract

This research examines the development and impact of Central Bank Digital Currency (CBDC) in India. It highlights that the pilot program is currently active with nineteen banks, and two non-bank entities, CRED and MobiKwik, have been authorized to participate. These entities will provide CBDC wallet services to users through the Digital Rupee app of their respective banks, available on the Play Store (Android) and the App Store (iOS). The study also investigates the circulation of the Indian rupee, including e₹ retail and e₹ wholesale. It concludes that CBDC is designed to complement existing monetary systems rather than replace them, offering an additional payment option for users without displacing current methods. Supported by India's advanced and affordable payment infrastructure, which is accessible, convenient, efcient, safe, and secure, the Digital Rupee (e₹) aims to boost India's digital economy, enhance the efciency of monetary and payment systems, and promote greater nancial inclusion. This study nally concluded that improving nancial inclusion is a key benet of digital currency adoption, as it helps eliminate socio-economic barriers and overcome challenges related to connectivity and physical banking infrastructure, thereby increasing participation among previously underserved populations in the nancial system.