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payments. Additionally, as more tech enthusiasts express offshore tax havens, including the Bahamas, Eastern
interest in using the e-rupee in the future, it may become Caribbean Union member states, Jamaica, Nigeria, and
easier to find others with e-rupee wallets. Ecuador.

The Reserve Bank of India (RBI) might encounter difficulties Why Retail Users Might Decline:
in persuading the common citizen to transition from their
In essence, none of the major economies have formally
physical stacks of paper currency or their existing payment
introduced a CBDC. While the wholesale e-rupee could serve
wallets and apps to embrace the digital version of the rupee
to diminish default risks and lower operational expenses for
for their everyday transactions.
banks, the practicality of the retail e-rupee remains
uncertain.
The Context:
For those seeking clarification on this matter, the e-rupee Initially, it may hold a certain novelty value, attracting users
represents the digital counterpart of the currency issued by seeking to showcase their adoption of this digital innovation.
the central bank. Each e-rupee can be exchanged for an However, whether it will expand and become as deeply
equivalent denomination of physical currency, possessing ingrained in our daily lives as physical cash or UPI is a subject
nearly all the characteristics of traditional currency-it is of debate.
legally recognized as a medium of exchange and can serve
as a store of value. Let's begin by assessing the e-rupee in comparison to physical
cash. The digital rupee wallet mirrors our physical wallet,
Wholesale Central Bank Digital Currency (CBDC) is designed allowing us to store digital representations of currency notes
for significant inter-bank and corporate transactions, and coins. This can be used for in-store purchases or
whereas retail CBDC is akin to the everyday cash transferred to another individual, among other uses. The
transactions conducted by individuals. digital rupee offers greater convenience, eliminating the
hassle of carrying physical currency and seeking change from
Initially conceived as an alternative to private merchants. Nevertheless, the pertinent question arises:
cryptocurrencies like Bitcoin, CBDCs are now regarded by "When UPI-based payments already offer these benefits at
central banks as an additional payment avenue aimed at no cost, what incentive does one have to switch to the e-
reducing the reliance on physical cash in the economy and rupee?"
curbing tax evasion.
In numerous cases, cash-based transactions are favored for
India, along with other nations, is experiencing significant their ability to escape the scrutiny of tax authorities and
international pressure in this domain, as progress in CBDC other regulatory bodies, preserving anonymity. In other
development is occurring rapidly worldwide. According to words, the absence of a transaction trail is a primary reason
the Atlantic Council's CBDC tracker, 130 countries are
actively engaged in CBDC projects, with 19 G20 member
states in advanced stages of CBDC development. Notably,
China has made substantial strides in its pilot CBDC project.

However, most central banks are proceeding cautiously due
to the uncertainties surrounding the potential impacts on
bank deposits, systemic liquidity, the informal economy,
security risks associated with digitizing the entire currency
management system and other related factors.

To date, only 11 countries have officially launched a CBDC.
These countries tend to have smaller populations or are

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