MC India Web 3.0: India’s e-Rupee finds new use cases in MSME credit, tourism and healthcare

From programmable government subsidies to tokenised carbon trading and cross-border trade settlements, India’s central bank digital currency (CBDC), or e-rupee, is entering its next phase of use case expansion, according to industry leaders.

Ajay Rajan, Country Head, Government, Multinational & International Business, Transaction Banking and Knowledge Units at Yes Bank, said the pilots have entered a more advanced stage, with both scale and scope improving.

“The primary difference between UPI and CBDC is that the former is actually digital money, whereas CBDC is digital currency, it’s cash in a digital form,” Rajan said, while speaking at Moneycontrol India Web 3.0 summit in Mumbai.

“We are in the third year of the digital rupee now… there is around Rs 850 crore of digital rupee currency in circulation, and around 7.5 million users.”

He added that interoperability has helped expand its reach: “Because it's now interoperable with UPI, practically the entire 6.5 crore merchants who use UPI are also eligible for CBDC.”

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Programmable money for targeted lending

Building on Rajan’s remarks, Ashish Singhal, Founder and CEO of the Indian Banks’ Digital Infrastructure Company (IBDIC), said programmability is unlocking new lending use cases.

“We are working on MSME financial inclusion, where funding can reach deeper tiers of the supply chain that are not directly supplying to a creditworthy anchor,” he said. “We ran a sandbox pilot with RBI, where we tokenised invoices issued by the tier-one supplier and accepted by the anchor, and these tokens flow through the system.”

He explained that such programmability could transform how banks meet their priority sector lending (PSL) obligations. Under this model, funds issued to banks as wholesale CBDC could be pre-programmed to be deployed only toward priority sector segments such as small businesses.

Once disbursed, the SME would receive the money in CBDC form, which could later be converted into regular rupees for transactions. This, Singhal said, ensures that “the funding has gone as part of programmability,” directly aligning credit flow with regulatory intent.

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Trade and cross-border settlements

Singhal also pointed to trade finance as another area of opportunity. “Our trade and exports are growing at about 8–9%. To meet the $2 trillion trade objective by 2030, we require a CAGR of 16–17% in cross-border,” he said. “If these can be replaced by CBDC and instant settlement can happen… the person on the other side will be able to get the money immediately. That entire currency risk goes away.”

He added that the technological foundations for CBDC are already in place, with most remaining challenges being geopolitical rather than technical. He noted that the digital rupee infrastructure has proven capable of enabling faster and more secure transfers, and that broader adoption now depends on international cooperation. “The geopolitical considerations, if they are solved, I think the money movement can now be instant and efficient with lower cost,” he said.

Tirtha Chatterjee, Partner at BCG, said pilots in other countries already show measurable benefits.

“The cost of a cross-border payment can be reduced by 50%. The settlement time can be brought down from one to three days to seconds,” Chatterjee said. “India is the country with the largest amount of remittances, $150 billion annually, so that’s a huge pool to unlock.”

He also said CBDCs could help reduce dependence on foreign currencies. “If India gets into CBDC engagements bilaterally with some of the African countries, maybe we do not need any other intervening currency,” he added.

Tourist wallets and tokenised assets

Rajan said the Reserve Bank of India, along with ecosystem partners, is exploring the introduction of CBDC wallets for foreign tourists. The idea is to enable visitors to obtain an e-rupee wallet instantly after completing passport-based KYC, allowing them to load it with local currency for use during their stay.

This, he explained, would remove the need for physical cash exchanges at airports or money changers while also showcasing India’s digital payments infrastructure to international visitors. “You’re actually eliminating the usage of cash and giving a flavor of India’s progress on digital payments to the global audience,” he said.

Rajan also highlighted asset tokenisation as a key emerging use case for CBDC. He explained that as more assets, ranging from carbon credits to renewable energy units, become tokenised, there will be a growing need for a secure and legitimate form of digital settlement.

“Any asset tokenisation solution will also require a legitimate settlement, and this is where CBDC can actually play a very critical role,” he said.

Offline CBDC for rural and low-connectivity areas

Some offline CBDC transactions are already live in limited forms, especially in areas with poor connectivity. The RBI, Rajan noted, is working with ecosystem partners to expand such use cases.

“If offline CBDC can become a big catalyst, it solves for real financial inclusion,” he said, adding that programmability would allow direct benefit transfers to reach users’ wallets without requiring a bank visit.

ESG traceability and healthcare data

Divyansh Nasa, Partner at EY, said new pilots are also emerging in supply chain traceability and healthcare data management.

“When we are exporting to markets outside India where there is a carbon tax or ESG traceability requirement, having the right technology helps identify the source and justify a lower tax rate,” he said. “A lot of multinationals manufacturing in India are doing this to ensure better tax applicability.”

Nasa pointed out that the healthcare sector could also benefit from CBDC-linked digital frameworks that enable better data accessibility. He explained that while large volumes of patient information are stored electronically across hospitals, insurers often lack access to this data.

Integrating such systems, he said, could help democratise health records, allowing for faster claim processing and significantly reducing both the time and cost of healthcare transactions.

Government pilots and on-ground adoption

The panel noted that several government programs have already begun experimenting with e-rupee for direct benefit transfers and targeted payments.

The PM Vidya Lakshmi scholarship scheme is among the pilots using e-rupee to ensure funds reach students directly and are spent only at recognised institutions. The digital currency is also being tested under a unified pension scheme for informal workers, as well as in horticulture payments in Uttarakhand and electric scooter subsidy disbursements in Haryana.