Fintech firm Cred has become the first non-bank entity to roll out access to India’s central bank digital currency (CBDC), marking a significant step in the Reserve Bank of India’s (RBI) e-rupee project. The move positions Tiger Global and Peak XV-backed Cred as a pioneer among fintech firms in integrating digital rupee transactions into mainstream financial services.
The announcement follows RBI’s April 2024 decision to allow payment firms to join the e-rupee pilot, which was previously limited to banks.
Expanding the Digital Rupee Ecosystem
Cred will provide access to its e-rupee wallet to a select group of users, with the issuance of e-rupee tokens facilitated by YES Bank, the company confirmed in a statement on Tuesday.
“Our goal is to make e-rupee transactions frictionless and drive its adoption among the most creditworthy Indians,” said Kunal Shah, founder of Cred.
Competition in the Digital Currency Space
Cred’s early entry into the e-rupee ecosystem gives it a head start over major payment firms like Google Pay (Alphabet), PhonePe (Walmart-backed), Amazon Pay, and MobiKwik. According to an August 2024 Reuters report, these firms had applied to join the digital currency pilot but have yet to roll out access.
The RBI had first launched its CBDC pilot in December 2022. They aimed to provide a secure digital alternative to physical cash. Initially, e-rupee transactions were restricted to banks. However, an April 2024 policy shift allowed fintech firms to participate, expanding opportunities for digital currency adoption in India.
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Challenges in Driving CBDC Adoption
Despite early momentum, e-rupee transactions have slowed, reflecting global challenges in widespread CBDC adoption. Central banks globally struggle to make digital currencies mainstream. Key obstacles include low consumer awareness, limited merchant acceptance, and interoperability issues with existing payment systems.
With a large user base and a focus on creditworthy consumers, Cred’s entry into the e-rupee ecosystem could boost mainstream adoption. The move also highlights growing private sector involvement in shaping the future of digital finance in India.
