India is considered to be in the launch phase. The Reserve Bank of India announced its pilot project in October 2022 and officially launched it on November 1, 2022. The pilot involved nine banks and was designed to test a wholesale CBDC. On December 1, 2022, the Reserve Bank of India expanded its operation to pilot a retail CBDC (referred to as a digital rupee). Initially, this pilot involved 13 banks in 26 cities. However, as with describing the CBDC in China, the use of the term “pilot” should be taken with a grain of salt considering the retail CBDC pilot in India had an estimated 1,460,000 users and 310,000 merchants in 2023. In 2024, that number grew to 4.3 million users and 4 million merchants. In other words, around 10 percent of the population has access to the CBDC at this time. Therefore, it is considered to be in the launch phase.

CBDC History and Development

In 2017, it was reported that the Reserve Bank of India was considering issuing its “own cryptocurrency.”

In 2021, there was a bill proposed that simultaneously sought to ban cryptocurrency in India and launch a CBDC. That same year, the Reserve Bank of India issued a report that claimed that CBDCs were worth pursuing because CBDCs can be designed to “promote non-anonymity at the individual level, monitor transactions, … [and disperse] central bank ‘helicopter money.’” In an October 2022 report, the Reserve Bank of India wrote that an advantage of a retail CBDC is that “the central bank has complete knowledge of retail account balances.”

In February 2022, it was reported that Indian finance minister Nirmala Sitharaman said that a CBDC would “lead to a more efficient and cheaper currency management system.” And after that, there was a bill that sought to expand the Reserve Bank of India Act to give the central bank the authority to issue a CBDC. Separately, the Reserve Bank of India announced its pilot project in October 2022 and officially launched a wholesale CBDC pilot on November 1, 2022 followed by a retail CBDC pilot on December 1, 2022.

In September 2023, it was reported that there were around 18,000 CBDC transactions per day. However, the Reserve Bank of India hoped to see 1,000,000 transactions per day by the end of 2023. For comparison, the Unified Payments Interface (India’s real-time payments system) experiences over 300,000,000 transactions per day in India. To access the retail CBDC pilot, citizens must create an account with one of the 13 banks selected for the Digital Rupee Pilot Program. Then, they must download the mobile app to create a wallet and load in money.

In December 2023, the Reserve Bank of India reached its goal of 1,000,000 transactions per day. However, it’s unclear if this goal was sustainable. Reserve Bank of India deputy governor T Rabi Sankar said, “When we targeted 10 lakh transactions, a lot of coordinated efforts were required for it to be reached. Then we found issues in terms of scalability of technology and banks being able to handle that. So for the last few weeks we have largely been addressing those issues.”

In 2024, the Reserve Bank of India announced that it was exploring ways to offer offline CBDC transactions and enhanced programmability. While offline payments help with both reliability and convenience, it’s likely this announcement was partly motivated by only roughly 50 percent of the Indian population having access to the internet.

In March 2024, Reserve Bank of India governor Shri Shaktikanta Das was asked when “we should expect the full-fledged launch of the … retail digital currency?” He responded saying, “We are in no great hurry to launch the digital currency because we want to be absolutely sure about the safety and robustness and the integrity of the digital currency so it’s a pilot project.” While framed as just a pilot project, governor Das acknowledged that the number of people using the CBDC is “very high” at 4.3 million users and 4 million merchants.

Human Rights and Civil Liberties Concerns

India earned a 66 out of 100 in Freedom House’s 2023 Freedom in the World report. Unfortunately, there are many concerns regarding the treatment of human rights and civil liberties. Within the limited context of the issuance and use of CBDCs, however, the most concerning issue is the use of government powers to target and harass political opponents.

Freedom House reports that the “constitution guarantees civil liberties including freedom of expression and freedom of religion, but harassment of journalists, nongovernmental organizations (NGOs), and other government critics has increased significantly [and the Bharatiya Janata Party] has increasingly used government institutions to target political opponents.” Furthermore, Amnesty International reported that powers to arrest, search, and confiscate property “have been repeatedly abused to repress civil society and limit dissent.” Amnesty International also reported that, “unlawful and politically motivated restrictions were placed on civil society organizations and human rights defenders including activists, journalists, students, and academics.” This experience could be exacerbated by a CBDC. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.