India’s Largest Retail Chain to Accept Payments in CBDC
India's largest retailer Reliance Retail has announced plans to accept payments in the digital rupee in a move that could boost the nation's adoption of CBDCs.
The retail chain has partnered with ICICI Bank, Kotak Mahindra Bank, and fintech Innoviti Technologies to add support for the digital rupee in its Freshpik line of stores across the country, TechCrunch reported Thursday, detailing that customers will be provided with a dynamic digital rupee acceptance QR code that they can scan and make the payment.
As per the report, Reliance Retail has rolled out the support for CBDC at its gourmet store line Freshpik and plans to extend the feature across other stores in the future. V Subramaniam, Director, Reliance Retail, reportedly said:
“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.”
India's central bank has long been a supporter of Central Bank Digital Currencies (CBDCs), calling them "the future of money." The country started a pilot program of its digital currency in cooperation with nine banks in November last year.
The Reserve Bank of India hopes to lower the economy’s reliance on cash, enable cheaper and smoother international settlements and protect people from the volatility of private cryptocurrencies with the digital rupee. The central bank next plans to experiment CBDCs for wholesale transactions, and cross-border payments.
“e₹ is a game-changer in the digital revolution unleashed in the country,” Deepak Sharma, President and Chief Digital Officer at Kotak Mahindra Bank, reportedly said. “All customers having e₹-R wallets will now be able to enjoy an effortless, safe and instant way of digital transactions at Reliance Retail stores.”
On the other hand, the RBI has long maintained a harsh stance toward digital assets, arguing that the nascent asset class has no underlying value. The central bank has constantly warned investors and the government against crypto, citing volatility as well as risks of fraud and scams.
Last month, India’s central bank governor Shaktikanta Das said cryptocurrencies don't have any intrinsic value and their perceived “value is nothing but make-believe." He said cryptos are not even worth a tulip, alluding to the well-known Dutch tulip mania blow-up in the early part of the past century.
The country, which currently holds the G20 presidency, also plans to use this opportunity to coordinate global crypto regulation and study the implications of cryptocurrencies for the economy, monetary policy, and the banking sector in order to inform a policy consensus.