India's RBI plans expansion of digital rupee through welfare schemes, cross border payments

MUMBAI: The Reserve Bank of India is planning to expand the digital rupee to more applications in welfare payments and test its use in cross-border transactions, it said in its 2025-26 annual report on Friday.

The move comes as India seeks to broaden the use of the digital rupee and explore its role in overseas payments.

The RBI has conducted multiple welfare-linked central bank digital currency pilots during the 25/26 fiscal year including in states and union territories such as Gujarat, Puducherry and Chandigarh where beneficiaries received food subsidies through digital rupee, the RBI said.

“At the institutional level, multiple government agencies commenced  pilots in various direct benefit transfer (DBT) schemes leveraging programmability feature of CBDC to ensure productive utilisation of public funds,” RBI said in its annual report.

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Reuters had reported in April that India is piloting at least ten CBDC pilots across the country to test whether the e-rupee can be used to deliver welfare payments more efficiently.

The push comes even as retail e-rupee circulation fell to 7.71 billion rupees as of March 31, 2026, from 10.16 billion rupees a year earlier, annual report data showed.

To advance cross-border payments, the RBI has signed a digital assets pact with Singapore’s monetary authority and is discussing pilot projects with Singapore and the United Arab Emirates.

It is also participating in multilateral initiatives led by the Bank for International Settlements, it said in the annual report.

Separately, the RBI said its cloud platform for financial firms went live in beta mode with nine users, making such a move amongst the first among central banks. Reuters was the first to report the RBI’s plan.

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“The work on phase I of the IFS cloud services is in advanced stage,” RBI said.

The phase I of the RBI’s Indian Financial Sector (IFS) cloud will have basic services and subsequently work on Phase II of the cloud with advanced services will be initiated, RBI said.