India's Digital Rupee Crosses Billion in Transactions as RBI Expands UPI-like Infrastructure for CBDC

February 11, 2026 | India

India's central bank digital currency (CBDC), the digital rupee (e₹), has crossed the $2 billion (₹16,500 crore) milestone in transactions just 14 months after its limited launch, according to data released by the Reserve Bank of India. The rapid adoption comes as RBI expands the digital rupee's infrastructure to mirror the success of India's Unified Payments Interface (UPI) ecosystem, which processes over $150 billion monthly.

"The digital rupee is not just about technology—it's about financial inclusion at scale," said RBI Governor Shaktikanta Das during the annual Monetary Policy Review. "We're building an ecosystem that combines the efficiency of digital payments with the trust and stability of central bank money" (Source: RBI: Digital Rupee Update).

The expansion includes several key developments:

Merchant Integration: Over 500,000 merchants now accept digital rupee payments through Point of Sale (PoS) terminals, QR codes, and mobile apps (Source: Bloomberg: Merchant Adoption)
Bank Partnerships: 24 commercial banks now offer digital rupee services, up from just 9 at launch (Source: LiveMint: Bank Partnerships)
Offline Transactions: New offline functionality allows peer-to-peer transfers without internet connectivity, crucial for rural areas (Source: The Hindu: Offline Capability)
Government Integration: Digital rupee now accepted for select government services and benefit disbursements (Source: PIB: Government Services)

The technology behind India's digital rupee is based on distributed ledger technology (DLT) but operates on a permissioned network managed by RBI. Unlike cryptocurrencies, the digital rupee is fully backed by reserves and carries the same legal status as physical currency (Source: RBI: Technology Framework).

"India's approach to CBDC is unique in its focus on financial inclusion and interoperability with existing payment systems," said Nandan Nilekani, former UIDAI chairman and architect of India's digital identity system. "The digital rupee complements UPI rather than competing with it, creating a more resilient payment ecosystem" (Source: India Today: Nilekani Interview).

Adoption has been particularly strong in tier-2 and tier-3 cities where the combination of merchant acceptance and offline functionality addresses specific local needs. In cities like Indore, Surat, and Lucknow, digital rupee transactions have grown 300% month-over-month for the past three months (Source: Economic Times: Tier-2 Growth).

The success has not gone unnoticed globally. The Bank for International Settlements highlighted India's digital rupee as a model for emerging markets in its annual CBDC survey, noting its "pragmatic approach to gradual rollout and ecosystem building" (Source: BIS: CBDC Survey 2026).

Several fintech companies have built applications on top of the digital rupee infrastructure. Paytm has integrated digital rupee wallets into its platform, while startups like DigiRupee Wallet and BharatPay have launched dedicated digital rupee services targeting the unbanked population (Source: YourStory: Fintech Innovation).

The expansion comes as RBI prepares for Phase 3 of the digital rupee rollout, which will include cross-border transactions with select partner countries. Pilot programs with the UAE and Singapore are scheduled to begin in Q2 2026, potentially positioning the digital rupee as a bridge currency in international trade (Source: Business Standard: International Plans).

RBI has also announced plans to integrate the digital rupee with India's Aadhaar biometric identity system, which could enable instant person-to-person transfers without requiring mobile numbers or bank accounts—a breakthrough for financial inclusion (Source: Telegraph: Aadhaar Integration).

Privacy considerations remain a key focus, with RBI implementing a "privacy by design" approach that balances transaction monitoring needs with user confidentiality. Transactions under ₹2,000 require no additional identification, while higher amounts follow Know Your Customer (KYC) protocols similar to existing banking regulations (Source: Scroll: Privacy Framework).

The Digital Rupee User Protection Act, passed by Parliament in December 2025, provides legal safeguards for users and establishes clear recourse mechanisms for disputes, addressing concerns raised by consumer advocacy groups (Source: PIB: User Protection Act).

Looking ahead, RBI aims for $10 billion in monthly digital rupee transactions by March 2027, supported by planned features like programmable money for targeted government subsidies and micro-insurance products built on the digital rupee infrastructure (Source: RBI: 2027 Roadmap).

References

Digital rupee concept with Indian currency symbols