State Bank of India Introduces UPI Integration for Digital Rupee
India's largest public sector bank, State Bank of India (SBI), has introduced UPI (Unified Payments Interface) interoperability with Digital Rupee, India’s Central Bank Digital Currency (CBDC).
Currently, there are 300 million UPI users and 500 million merchants who use UPI to accept money for their businesses in India.
The move is aimed at enhancing the convenience and accessibility of digital transactions for its customers.
Through the 'eRupee by SBI' application, CBDC users can integrate their Digital Rupee holdings with the UPI platform, allowing for efficient scanning of merchant UPI QR codes to facilitate secure transactions, the bank announced in a press release.
Earlier, the public sector bank had participated in the Reserve Bank of India's (RBI) retail digital e-rupee project in December 2022.
Digital Rupee’s Integration with Widely Used UPI System
The successful integration of CBDC and widely used UPI marks a milestone as it would increase the use of the national digital currency in everyday transactions.
As per an economic survey, UPI accounted for 52 percent of the total 8.84 billion financial digital transactions that tooke place in 2022 financial year.
SBI believes that this integration will have a positive impact on the digital currency ecosystem, aligning with India's ongoing transition towards a cashless economy.
The introduction of UPI interoperability with the Digital Rupee aligns with the growth and popularity of the UPI payment system, which allows customers to make instant payments using a Virtual Payment Address (VPA).
Indian Government Rolls Out Digital Rupee to Compete with Crypto
The Digital Rupee, introduced as a pilot project by the Reserve Bank of India on December 1, 2022.
Though the current government has pushed for digital rupee adoption, it has not made any favorable remarks for cryptocurrencies.
The introduction of digital rupee is seen as a tool to ward off competition from decentralized cryptocurrencies like bitcoin.
Like China’s digital yuan, digital rupee is similar to physical cash, with the flexibility to be converted into other forms of money, such as bank deposits.
Currently, there are no specific laws in India to govern cryptocurrencies. Earlier, the central bank had issued a circular to all the banks in India to stop supporting crypto payments, which later was overturned by the Supreme Court of India.