Little over a week ago the Reserve Bank of India set the stage for another round of disruption in the payments landscape of India. It circulated a concept note on the digital rupee or what it preferred to call the e-Rupee.
At its simplest, the e-Rupee mimics its equivalent, cash. Yet it does not exist physically.
But it has other qualities which cash does not possess. Given its digital avatar, the e-Rupee enables instant, friction-less transactions. Both within the country and cross-border transactions entailing inbound remittances from expats and payments for trade transactions. It is a clear means of improving ease of doing business.
At the same time the e-Rupee, given that it is digital, is programmable. In other words it can be programmed for specific uses. In the case of Direct Benefits Transfer (DBT), where India has transferred Rs25 trillion, it will be revolutionary. It has the potential of eliminating leakages altogether. Remember the decision to opt for DBT to deliver social welfare payments, has so far saved the exchequer nearly Rs3 trillion—no small sum.
To understand this and more about the e-Rupee, StratNews Global spoke to Mihir Gandhi, partner at PwC and someone who co-authored a white paper on the subject when the idea was first proposed a year ago.
