MobiKwik, Cred join hands with RBI to fully launch CBDC (e₹) for Android; check features, usage

One Mobikwik Systems Ltd. and Cred have recently initiated their individual e-rupee pilot programs in partnership with the Reserve Bank of India (RBI). This collaboration marks their distinction as the pioneering fintech platforms to join hands with the RBI for the implementation of the central bank digital currency (CBDC).

Yes Bank has been selected as the primary sponsor bank to facilitate the issuance of the CBDC for both of these third-party application providers.

With this move, Cred and Mobikwik became the first fintech platforms to partner with the RBI on the central bank digital currency.  Yes Bank will be the first sponsor bank to enable the CBDC issuance for both these third-party application providers.

Features 

MobiKwik has introduced the e₹ wallet, which is a Central Bank Digital Currency (CBDC) wallet. This wallet is now accessible to all Android users of MobiKwik, offering features for peer-to-peer (P2P) and peer-to-merchant (P2M) transactions. By utilising the Unified Payments Interface (UPI), users can easily make payments by scanning any UPI QR code using the e₹ wallet.

Existing MobiKwik users who have completed their Know Your Customer (KYC) process can immediately activate an e₹ wallet and transfer funds from their bank accounts. New users will be required to complete a video KYC procedure in order to access this feature.

With a daily transaction limit of Rs 50,000 and a per transaction limit of Rs 10,000, the e₹ wallet supports denominations ranging from Rs 0.50 to Rs 500.

Cred will be providing access to its e-rupee wallet to a limited group of users, with the issuance of e-rupee tokens in the wallets being managed by YES Bank.

While MobiKwik has rolled out a full version of its e₹ wallet to all Android users, Cred has launched a beta version accessible to a limited user base. Both platforms are leveraging partnerships with Yes Bank to enable these services.

In the upcoming months, Cred will introduce updates that will allow for programmable merchant payments, integration with Cred Pay, and PIN-less transactions below Rs 500. These features will be accessible to all Cred members.

Additionally, with the introduction of the e-rupee wallet, Cred members who are whitelisted for this service will be able to make payments through bank accounts linked to the Unified Payments Interface and transfer funds to other CBDC wallets. To avail of this service, users must complete video KYC, enabling them to create and load their e-rupee wallets using UPI.

"This groundbreaking initiative by the RBI, along with Cred, will catalyse India's economic vision, reducing cash in circulation, driving financial inclusion and digital adoption, while strengthening India's leadership in global digital finance," founder Kunal Shah said. 

“The e₹ will help make the Indian rupee digital and boost the digital economy. We aim to encourage its adoption across the country and reduce cash dependency," said Bipin Preet Singh, Co-founder and Managing Director of MobiKwik.

CBDC

The Central Bank Digital Currency (CBDC), also referred to as the "Digital Rupee" or "e₹", is officially defined by the Reserve Bank of India (RBI) as a digital legal tender issued by a central bank. This form of currency is equivalent to sovereign currency and can be exchanged at a one-to-one ratio with existing physical currency.

At first, the RBI limited digital currency handling to banks, but in April 2024, it expanded eligibility to non-banking entities. MobiKwik, recognized for its creativity, was included in the RBI's CBDC project and swiftly launched the service.

US and CBDC

US President Donald Trump has recently approved an executive order prohibiting the development and distribution of Central Bank Digital Currency (CBDC) within the United States. Throughout his presidential campaign, Trump had expressed his intention to include the ban on CBDC as part of his agenda once he assumed office. This directive marks Trump's initial significant action relating to bitcoin and cryptocurrency during his second term as President. The executive order defines CBDC as "a type of digital currency or monetary value, denominated in the national unit of account, which represents a direct liability of the central bank."

The new executive order opposes the implementation of CBDC, citing concerns regarding privacy, national independence, and financial stability. Nevertheless, it encourages the establishment of a more resilient, private sector-driven digital asset ecosystem, with a focus on dollar-backed stablecoins as an alternative to CBDCs.