In brief

In brief

  • Central Bank Digital Currency — blockchain-based digital money — could be the new infrastructure for trust, resilience, and economic efficiency.
  • Its features — identifiability, programmability, and decentralized consensus — can help in solving a host of problems.
  • We consider its three forms — wholesale CBDC, retail CBDC, and tokenized bank deposits — together as Digital Rupee.
  • The RBI should establish Digital Rupee as tokens, leverage fractional reserve banking, and set up a Digital Rupee Corporation of India.

CBDCs are currently being developed by nearly 100 central banks around the world. The topic has generated much debate across the country and India, due to its public digital infrastructure – India Stack, Open Credit Enablement Network (OCEN), sites like etc.– is uniquely poised to leverage CBDC

CBDC possibilities can be realized in three ways – central bank wholesale money (Wholesale CBDC), central bank digital retail money (Retail CBDC), and commercial bank money (tokenized deposits or liability of commercial banks) created under fractional reserve banking. While technically speaking, only (Reserve Bank of India (RBI)- issued digital money can be termed as Digital Rupee, we are also including tokenized rupee-denominated commercial bank liabilities under ‘Digital Rupee’ for the sake of simplicity.

Digital Rupee is Different from a Digital Representation of Money

CBDC and cryptocurrencies, such as the popular Bitcoin, belong to a class of digital currency. However, a CBDC issued by a central bank to represent its liability is a more trusted form of money. CBDC also differs from the electronic money deposits that most of us hold with commercial banks, which are mere digital representations of the currency value. Much like the distinctive serial number on a currency note, every unit of digital currency can be uniquely identifiable. Electronic money does not have this characteristic.

Digital rupee, with its unique characteristics of identifiability, programmability and a distributed ledger can unleash a new set of economic possibilities

CBDC to improve resilience, prevent fraud, improve welfare distribution

CBDC can help us address a host of issues — preventing banking fraud, strengthening the welfare distribution system, improving the business environment, reducing the cost of cross-border payments, and increasing systemic resilience.

The adoption of a Digital Rupee would support greater diversification of India’s payment system by offering alternative payment rails.

While the current system relies on post-facto checks to prevent fraud, CBDC could address this proactively with embedded programmability and regulated traceability.

A Digital Rupee held by non-residents and used for cross-border financial transactions will enable new retail payment possibilities and business models.

CBDC could further strengthen the welfare distribution and make it more robust by plugging leakages, such as preventing welfare money from being diverted to unrelated bank accounts.

View All


India’s cash propensity, which is higher than those of the Nordic countries, the UK and Australia. 1

38 bn

The number of UPI transactions conducted in the year 2021. 2

$50 bn

The approximate amount of money lost by banks to fraud between 2018 and 2020, as per RBI data. 3

Taking a dip in the ocean is not equivalent to taking a dip in the entire ocean.

CBDC/digital rupee is an extremely vast, complicated, and emerging topic which cuts across economics, monetary systems, behavioural sciences, and established digital infrastructure.

While all the challenges and constraints facing both the Central Bank and commercial banks have not been considered, this report aims to start a conversation.

1 Assessment of the progress of digitisation from cash to electronic

2 UPI signs off 2021 on a high: Dec transaction value crosses Rs 8 trillion

3 Analysis of top 100 bank frauds

Pranav Arora

Managing Director Financial Services and Lead – Applied Intelligence, Accenture in India

Ousmene Mandeng

Senior Advisor – Blockchain and Multiparty Systems, Accenture

Kiran Dhanwada

Client Account Leadership, Senior Manager, Financial Services, Accenture in India

Gaurav Shobhane

Business Strategy Manager, Financial Services, Accenture in India


CBDC for retail, wholesale, international payments
CBDC and blockchain
What CBDC means for banks and non-banking firms

Subscription Center
Stay in the know with our newsletter Stay in the know with our newsletter