UPI QR codes for transactions in CBDC soon: RBI

Mumbai: Customers will be able to use QR codes of Unified Payment Interface (UPI) network for transactions using digital currency by end of this month, said Reserve Bank of India’s deputy governor T. Rabi Sankar.

Addressing heads of banks and fintech firms at an event organized by the Indian Banks Association, Sankar said interoperability of QR codes will encourage more central bank digital currency (CBDC) transactions.“Earlier merchants had to be onboarded and have a separate QR code for CBDC. This takes a lot of time. Therefore we have decided to allow interoperability,” he added.

“We will have an arrangement where CBDC will be settled in CBDC account or it will be settled in UPI account.”

Sankar asked banks to prepare for one million transactions a day using CBDT by the end of this year. This will give RBI enough data to study the impact of CBDC on the financial system, he added.

As of 30 June, the pilot for retail transactions using CBDC crossed one million users and 262,000 merchants.

At present, 10 banks are participating in a wholesale pilot while 13 banks are part of the retail pilot. To increase transactions, RBI has allowed interoperability to customers to use UPI QR codes for CBDC transactions. Sankar also urged bankers and fintech firms to have an informed debate on use of cryptocurrencies to ensure customers are not swayed by misleading advertisements.