India is turning to social benefits to drive adoption of its central bank digital currency as it prepares to put CBDC in the spotlight at a summit of BRICS countries later this year.
The Reserve Bank of India is running about 10 pilot programs routing part of the country’s roughly $80 billion welfare system through the electronic rupee, Reuters reported on Thursday. The effort aims to reduce leakage and corruption in subsidy programs while giving CBDC a clearer use case after a slow rollout.
In Phulenagar village in Maharashtra, farmers receive programmable subsidies covering up to 80% of drip irrigation costs, which can be spent only through approved sellers. A separate pilot project in Gujarat aims to onboard all 7.5 million households eligible for subsidized food by June, effectively using targeted transfers to expand uptake.
This push highlights a major challenge for CBDCs globally: usage. The electronic rupee now has around 10 million users, up from around 7 million earlier this year, but cumulative transactions since its introduction in December 2022 total just $3.6 billion. This is still small compared to India’s Unified Payments Interface, which processes around $300 billion every month.
Early adoption efforts have sometimes been designed. CoinDesk reported in 2024 that several major banks, including HDFC, Kotak Mahindra and Axis Bank, had credited employee salaries into CBDC wallets to help the system surpass 1 million daily transactions in December 2023, a milestone that did not persist.
India’s domestic experiment comes as policymakers consider a larger geopolitical role for the technology. The Reserve Bank of India has urged the government to present a proposal to link CBDCs from the economies of Brazil, Russia, India, China and South Africa at the bloc’s 2026 summit, in a bid to streamline cross-border trade and reduce dependence on the US dollar.
This ambition carries a political risk. President Donald Trump has threatened to impose tariffs on BRICS countries seeking alternatives to the dollar and has already imposed tariffs on Indian imports linked in part to its purchases of Russian crude, raising the stakes for any coordinated monetary effort.
UPDATE (April 24, 90:27 UTC): Rewrote the title to explain the acronym CBDC.
