India's Finance Minister Urges RBI to Accelerate Digital Rupee Adoption

REC Pilot Signals Momentum

REC Limited, a government-backed infrastructure finance company, recently completed India's first tokenised corporate bond pilot under SEBI's regulatory sandbox. The pilot achieved same-day settlement by moving the bond and the digital rupee simultaneously, cutting out the usual clearing and settlement delays that plague traditional finance.

This proof-of-concept demonstrates the plumbing works. It also underscores why Sitharaman is pushing the RBI to move faster.

The Efficiency Case — and the Risks

Programmable CBDCs open new doors. A CBDC designed for welfare distribution could, in theory, be coded so that funds can only be spent on specific categories like food or education. Governments could target relief more precisely. Merchants could accept digital rupee with built-in compliance.

But speed cuts both ways. Sitharaman described AI as a double-edged sword in the context of transaction velocity. Faster settlement means faster fraud, faster errors, and faster contagion during periods of market stress. When settlement happens in milliseconds, so does the damage.

Narrow Rollouts, Modest Traction

The RBI has been running digital rupee pilots for several years now, gradually expanding the scope of use cases. The central bank's efforts now include live transactions with select banks and merchants, programmable welfare applications, and cross-border payment explorations.

Adoption has been modest so far, partly because the rollouts have been narrow in scope and partly because consumers have little reason to switch from existing payment rails like UPI. The RBI's 2025-26 report outlined plans for additional scaling and cross-border pilots, signaling the central bank is listening to Sitharaman's call to move faster.