डिजिटल रुपये से आप क्या समझते हैं ? इस सन्दर्भ में, भारत के केन्द्रीय बैंक डिजिटल मुद्रा (सी बी डी सी) की कार्यप्रणाली तथा प्रगति का वर्णन कीजिए।
Read this question in English
What do you mean by Digital Rupee ? In this context, explain the working and progress of India’s Central Bank Digital Currency (CBDC).
🧭 How to think about this question · directive: “what / explain”
Decode the demand
- Two directives: 'what do you mean by' asks for a definition of the Digital Rupee; 'explain the working and progress' asks how India's CBDC is issued and used, and how far the pilots have gone. Three things to answer: meaning, working, progress.
- The issue in one line: e₹ is sovereign money in digital form, tested through RBI pilots since late 2022 rather than launched at once.
- The trap: treating e₹ as 'another UPI'. The examiner wants you to show the difference: UPI moves bank deposits, e₹ is central-bank money itself.
Think in a structure
- Open with the legal definition (Section 26, RBI Act) and the contrast with a deposit; one line that turns to working and progress.
- One heading per demand part: meaning (what it is and is not), working (variants, two-tier model, token design, payments), progress (reach, features, limits).
- Each point carries a keyword, a reason and one RBI-anchored fact; dates and documents go in sub-points.
- Visuals: a flowchart of the two-tier issuance for 'working'; a timeline for 'progress'. Both drawable in 30 seconds.
- End positively: three concrete steps for a full launch, then anchor on Viksit Bharat @2047 as the policy vision.
Facts checked at source (6)· open
- The retail e₹ has been live in pilot mode since 1 December 2022.RBI — Digital Rupee (e₹) FAQs ↗“The e₹ issuance, distribution, and usage within the retail segment (for members of the public) is live in pilot mode with effect from December 1, 2022.”
- RBI creates e₹ and issues it electronically to banks and non-banks, mirroring the issue of paper currency.RBI — Digital Rupee (e₹) FAQs ↗“Creation and issuance of retail e₹ is identical to the arrangement for issuance of paper currency i.e., RBI creates e₹ and issues them to banks and non-banks electronically.”
- e₹ wallets in the retail pilot are provided by both banks and non-banks.RBI — Digital Rupee (e₹) FAQs (PDF, January 2025) ↗“e₹ wallets are being currently provided by banks and non-banks, which are part of the retail CBDC pilot.”
- The Union Budget 2022-23 proposed introducing a Digital Rupee, using blockchain and other technologies, to be issued by the RBI starting 2022-23.Union Budget 2022-23 — Budget Speech of the Finance Minister ↗“proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23”
- The first wholesale Digital Rupee (e₹-W) pilot, from 1 November 2022, had settlement of secondary-market transactions in government securities as its use case.RBI Press Release — Operationalisation of Central Bank Digital Currency – Wholesale (e₹-W) Pilot ↗“The use case for this pilot is settlement of secondary market transactions in government securities.”
- RBI's Concept Note on CBDC (October 2022) viewed a token-based CBDC as the preferred mode for retail CBDC because it is closer to physical cash, with account-based considered for wholesale.RBI — Concept Note on Central Bank Digital Currency ↗“token-based CBDC is viewed as a preferred mode for CBDC-R as it would be closer to physical cash”
Question: UPSC's CS (Main) 2026, GS Paper III — paper ↗. Guidance: Minimalist IAS, checked 8 Nov 2026 (how we verify). ·
Model answer· 397words · Minimalist IAS
The Digital Rupee (e₹) is the rupee in electronic form, legal tender issued by the RBI under Section 26 of the RBI Act, 1934; unlike a bank deposit or UPI balance, it is a direct liability of the central bank. India is testing it through live pilots, not a big-bang launch.
What the Digital Rupee means
- Sovereign digital money: same as a note, exchangeable one-to-one with the rupee, a claim on the RBI rather than on any bank.
- Not UPI, not crypto: UPI moves bank deposits and crypto has no issuer; e₹ is money itself, so its transfer is final settlement.
- Budget 2022-23 proposed the Digital Rupee, using blockchain and other technologies, to be issued by the RBI from 2022-23.
How India's CBDC works
- Two variants: wholesale e₹-W for interbank settlement (pilot from 1 November 2022); retail e₹-R for the public (from 1 December 2022).
- The first e₹-W pilot settled secondary-market trades in government securities.
- Two-tier model: the RBI creates e₹ and issues it to banks and non-banks, which distribute it through phone wallets, as with paper currency.
- Token-based design: digital tokens in note denominations, no interest, a bearer instrument closest to cash.
- RBI's Concept Note (October 2022) preferred token-based CBDC for retail and account-based for wholesale.
- Payments: person-to-person and merchant payments; e₹ and UPI QR codes are interoperable, so any UPI merchant can accept it.
- RBI creates e₹
- banks and non-banks
- phone wallets
- P2P and merchant payments
Progress of the pilots
- Feb 2022: Budget announcement
- 1 Nov 2022: e₹-W pilot
- 1 Dec 2022: e₹-R pilot
- 2024 onwards: offline and programmable e₹
- Wider reach: from four banks in four cities to more banks, non-bank wallet providers and locations.
- New features: offline payments for poor connectivity; programmability, money earmarked for a purpose such as targeted transfers.
- Limits to scale: little added convenience where UPI works; privacy, deposit disintermediation and cyber-security risks explain the calibrated rollout.
Way forward
- Use-cases UPI cannot serve: offline rural payments, programmable DBT, cheaper cross-border settlement.
- Privacy by design: cash-like anonymity for small values, with the Digital Personal Data Protection Act, 2023 as the frame.
- Protect bank deposits: holding limits and zero interest, so e₹ complements rather than replaces deposits.
e₹ gives the digital economy a public-money anchor; a full launch should rest on use-cases beyond UPI, offline reach and firm privacy safeguards, so that sovereign digital money, not private crypto, underpins Viksit Bharat @2047.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 8 Nov 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
