India's Digital Rupee has quietly crossed 10 million users, more than three years after the Reserve Bank of India launched the retail pilot on December 1, 2022. Cumulative transactions have touched roughly $3.6 billion, according to CoinDesk.

That sounds like real traction. It isn't, not yet. UPI alone processed 22.64 billion transactions in March 2026, per Reuters. The e-Rupee is still a fraction of that. So the RBI has changed tack: instead of chasing volume, it's routing welfare payments through the digital currency to force real-world use.
 

What the Digital Rupee actually is?

The e-Rupee is a tokenised, digital form of the rupee, issued directly by the RBI rather than a private bank. It exists only as digital tokens in a wallet, not as an entry in your savings account, and you don't need a bank account to hold it, according to Insightful Post.

Users can send money person-to-person or pay merchants by scanning a QR code, much like UPI, per the Press Information Bureau. The difference is who backs the money: this is central bank liability, not a bank deposit or a private wallet balance.
 

How to set it up?

Fifteen banks currently run the pilot, including SBI, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Bank of Baroda, Canara Bank and PNB, per ClearTax.

To start, download your bank's official e-Rupee wallet app, register, accept the terms, set a PIN, and load money in from your linked bank account, according to Upstox. Once loaded, you can pay or transfer like any QR-based app.

One genuine edge over UPI: the wallet can, in theory, work offline using near-field communication, useful in areas with patchy internet, per Insightful Post.
 

Welfare is the real test

The RBI's own framing has shifted. By 2026, its focus moved from transaction targets, it once eyed 1 million transactions a day, to testing specific features like offline NFC payments and programmable transfers for government schemes, per the RBI's own account as cited on Wikipedia.
 

That strategy is visible on the ground. On February 26, 2026, the government launched a CBDC-based food subsidy pilot under the Pradhan Mantri Garib Kalyan Anna Yojana in Puducherry, using programmable tokens that can only be redeemed for entitled foodgrains at authorised shops, according to India.com.

India is now running around 10 such pilots, threading parts of its roughly $80 billion welfare system through the e-Rupee, with Maharashtra and Gujarat testing programmable subsidies and food benefits, per CoinDesk. Programmability means the government can restrict exactly what a rupee can buy, a food subsidy stays a food subsidy, unlike cash.
 

Not everyone is convinced

Parliament isn't sold. Bhartruhari Mahtab, chairman of the Parliamentary Standing Committee on Finance, said plainly that "RBI's digital asset is not a flourishing asset," as reported by CryptoTimes.

The comparison to UPI is unavoidable. UPI is free, fast, works across every bank, and Indians already trust it. The e-Rupee has to earn that trust from scratch, against an alternative that already has hundreds of millions of daily users.
 

What comes next

The RBI isn't only looking inward. It plans to explore bilateral and multilateral cross-border CBDC pilots in 2026-27, and has signed a memorandum of understanding with Singapore's Monetary Authority while holding talks with the Central Bank of the UAE, per Business Standard.

For now, the e-Rupee's future in India runs through ration shops and subsidy transfers, not shopping malls. If it can prove itself where cash and UPI fall short, in patchy-network villages and tightly targeted welfare schemes, the RBI may finally have its answer for why a digital rupee needs to exist at all.