The Reserve Bank of India (RBI) is testing the offline functionality of its recently launched central bank digital currency (CBDC), the digital rupee, according to Ajay Kumar Choudhary, chief executive of the RBI. The move comes after the RBI launched the wholesale segment pilot for the digital rupee on November 1, 2022, onboarding 50,000 users and 5,000 merchants for real-world testing.

Since the launch of wholesale CBDCs, around $134 million in transactions have been completed as of February 25, with 800,000 transactions ongoing. These numbers indicate the growing popularity and potential use cases of CBDCs in India.

The digital rupee is expected to bring numerous benefits, such as reduced transaction costs, greater financial inclusion, and enhanced security features. The RBI aims to provide a digital alternative to traditional physical currency, making transactions faster, cheaper and more efficient.

With the digital rupee’s offline functionality being tested, users can continue to transact even in areas with little or no internet connectivity. This is an important feature for a country like India, where Internet penetration is still low in certain regions.

The digital rupee pilot was launched in the wholesale segment, which caters to financial institutions and large companies. However, the RBI plans to release the digital currency to the general public in the future.

India is not alone in its efforts to launch a CBDC. Several countries, including China, Sweden, and the United States, are exploring the possibility of introducing their own digital currencies. The rise of CBDCs is expected to have a significant impact on the traditional banking system as they have the potential to change the way people store, transfer and access money.

In conclusion, testing the offline functionality of the digital rupee is an important step towards wider adoption of CBDC in India. The wholesale segment pilot has already shown promising results, and the RBI’s plan to introduce the digital rupee to the general public could revolutionize the country’s financial sector.