The Reserve Bank of India, the country’s central bank, is set to introduce a wholesale central bank digital currency (CBDC) in the call money market.

The RBI launched retail and wholesale CBDC pilots in December 2022, with reports emerging that the retail pilot achieved more than 100,000 customers within its first four months. The pilot has set a target of one million transactions a day by the end of 2023, a target the RBI is confident it will hit.

Speaking to reporters, a spokesperson for the central bank said: “RBI is now planning to go interbank borrowing market, specifically call money market.”

Within this context, the CBDC – or e-rupee as it has been referred to since the pilot’s launch – would be used as tokens for call money settlement. This would allow lenders to settle short-term loans and borrow in the call money market with the CBDC, complementing traditional forms of money transfer and settlement.

Should this move prove successful, it would open up a new viable avenue for CBDCs to make call money settlement more efficient and secure in the digital age.

Elsewhere, Yes Bank – a partner of cryptocurrency Ripple and one of the largest banks in India – has announced that it had joined the RBI’s CBDC project.

The bank last week said that it had gone live with Unified Payments Interface (UPI) Interoperability on the RBI's CBDC app, which will allow users to scan any UPI QR code through the bank's app and make transactions with the e-rupee.

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