As part of its strategy to boost the adoption of its central bank digital currency, India is integrating welfare payments into pilot programs before showcasing the CBDC at an upcoming BRICS summit. The Reserve Bank of India has initiated approximately 10 pilot projects that channel parts of India’s $80 billion welfare system through the e-rupee, as reported by Reuters on Thursday. These initiatives aim to minimize corruption and leakage in subsidy schemes while providing a tangible application for the CBDC after its sluggish introduction.
In Phulenagar village within Maharashtra, farmers are benefiting from programmable subsidies that cover up to 80% of drip-irrigation expenses, with these funds being redeemable only at sanctioned vendors. Another pilot project in Gujarat is working to register all 7.5 million eligible households for subsidized food by June, using targeted transfers to expand the CBDC’s adoption.
This drive highlights a fundamental challenge faced by CBDCs worldwide: achieving widespread usage. Since its launch in December 2022, the e-rupee has seen user numbers increase to about 10 million from roughly 7 million earlier this year. However, total transactions have reached only $3.6 billion, which pales in comparison to India’s Unified Payments Interface that handles approximately $300 billion monthly.
Initial adoption attempts have occasionally been artificial. As reported by CoinDesk in 2024, major banks such as HDFC, Kotak Mahindra, and Axis Bank credited employee salaries into CBDC wallets, facilitating the system’s achievement of over 1 million daily transactions in December 2023—a milestone that was not sustained.
India’s domestic trials occur while policymakers contemplate a broader geopolitical role for the technology. The Reserve Bank of India has recommended to the government that it advance a proposal to interconnect CBDCs among Brazil, Russia, India, China, and South Africa at the bloc’s 2026 summit, with the goal of enhancing cross-border trade efficiency and reducing dependency on the U.S. dollar.
Such ambitions are not without political peril. Former President Donald Trump has threatened tariffs against BRICS nations seeking alternatives to the dollar and has already imposed duties on Indian imports partly due to its acquisition of Russian crude oil, elevating the stakes for any joint monetary initiative.
UPDATE (April 24, 90:27 UTC): Revises headline to clarify CBDC acronym.