e₹ and Fintechs: CBDC Use Cases, Hurdles and Outlook
Why in the news
Fintechs have started to tap the retail digital rupee (e₹), looking for uses that go past person-to-person and person-to-merchant payments.
Drivers of adoption
- Programmable payments for welfare schemes, hospital bills, fertiliser and other uses, going beyond the efficiency gains of DBT.
- Cross-border remittances that use CBDC technology and interoperable design by central banks.
- RBI approval for non-banks: MobiKwik and Cred can launch e₹ wallets, widening access through third-party payment apps.
| Challenge | Issue |
|---|---|
| UPI competition | Real-time UPI dominates P2P and P2M, so e₹ share is hard to build |
| Monetisation | No clear revenue path yet for fintechs; remittances may help as the ecosystem matures |
| Technology | Needs blockchain investment; wallets are token-based and interoperate with RBI and regulated institutions |
Future outlook
- Programmability: wallet funds can be tied to a purpose and cannot be spent elsewhere.
- Transactions can be scripted by expiry date, region or merchant category code (MCC).
- Purpose-based transactions can keep consumers engaged over the long term.
Exam angle
- Retail CBDC is called e₹ (CBDC-R).
- Terms: P2P, P2M, DBT, UPI, MCC.