TL;DR:
- India channels part of its $80 billion social welfare system through the e-rupee across roughly 10 pilot programs.
- Accumulated e-rupee transactions total just $3.6 billion since its December 2022 launch, compared to UPI’s $300 billion per month.
- The Reserve Bank of India is working on a proposal to link BRICS countries’ CBDCs ahead of the 2026 summit.
India has spent nearly four years trying to get its state digital currency (CBDC) off the ground, and the numbers are not cooperating. The Reserve Bank of India currently manages around 10 pilot programs that channel portions of the country’s social welfare system, valued at approximately $80 billion, through the e-rupee.
Its goal is to reduce fund leakage and corruption in subsidy programs, though the underlying reality reveals something more troubling: the government is using the most vulnerable segments of the population as a testing ground for an unprecedented financial control tool.
India and Its Money with Strings Attached
In the village of Phulenagar, in Maharashtra, farmers receive programmable subsidies covering up to 80% of the costs of drip irrigation, but they can only spend them at State-approved vendors. A similar pilot in Gujarat aims to bring in 7.5 million households eligible for subsidized food before June. This is not about financial inclusion: it is about money with conditions, whose use can be restricted, monitored, or unilaterally revoked by the issuer.
Organic adoption is nowhere to be found. E-rupee users have grown from 7 million to 10 million so far this year, but accumulated transactions since the December 2022 launch amount to just $3.6 billion, a marginal figure compared to the $300 billion per month processed by the country’s Unified Payments Interface. According to reports, banks such as HDFC, Kotak Mahindra, and Axis Bank credited salaries directly into CBDC wallets to artificially inflate the system’s metrics.
A Geopolitical Bet with a High Price Tag
The Reserve Bank of India is pressing the government to bring to the 2026 BRICS summit a proposal to interconnect CBDCs across Brazil, Russia, India, China, and South Africa, with the aim of reducing dependence on the dollar. President Donald Trump has already threatened tariffs against bloc members that seek alternatives to the US currency. India has also been hit with tariffs linked to its purchases of Russian crude oil, raising the political cost of any coordinated move in that direction.
