MobiKwik, Cred take the lead in CBDC rollout, launch e₹ wallets with Yes Bank

Pilot of CBDC

Digital payment platforms MobiKwik and Cred have entered the Central Bank Digital Currency (CBDC) space by launching their respective e-Rupee (e₹) wallets in partnership with the Reserve Bank of India (RBI) and Yes Bank, becoming the first non-banks to integrate and offer the RBI’s digital currency to users.

While MobiKwik has rolled out 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.

The move follows the RBI's April announcement proposing broader accessibility for CBDC, allowing non-bank entities to offer digital currency transactions. Previously, only banks could participate in the CBDC framework.

Currently, 15 banks offer CBDC wallets, RBI's website says.

After the announcement, many, including PhonePe, AmazonPay, Google Pay, Mobikwik and Cred, were seeking to join the Indian central bank's digital currency pilot by offering transactions via the eRupee and working with RBI on pilots.

There are 14 participants in the wholesale CBDC pilot, which includes banks and non-banks.

Wholesale CBDC is designed for use by financial institutions and intermediaries (operates within a restricted ecosystem), primarily to streamline interbank settlements and large-value transactions. Retail CBDC is for the general public and is used for everyday transactions much like physical cash but in a digital form.

What fintech apps are offering ?

Launched in partnership with Yes Bank (sponsor bank), Mobikwik's wallet allows users to send and receive funds to other CBDC wallets via a UPI-linked interface.

MobiKwik’s existing users, who already have full KYC done, will immediately be able to open an e₹ wallet and load it from their bank account. New users will have to complete video KYC before they can open an e₹ wallet.

Currently, e-rupee wallet has a daily transaction limit of Rs 50,000, per transaction limit of Rs
10,000.

Announcing the launch, Bipin Preet Singh, Co-founder and MD, MobiKwik said, “We expect that CBDC will make the Indian rupee digital and further expand the digital economy. Our goal is to drive the adoption of e₹ in India and move towards a less cash economy.”

Meanwhile, Cred’s e₹ wallet is currently available to a select group of users. Its future updates will include features like programmable merchant payments and integration with Cred Pay, the firm said in a statement.

"With the support of RBI, we're enabling the creditworthy to participate in shaping the future of digital currency," said Cred founder Kunal Shah said. "Our goal is to make e₹ transactions simple and encourage its adoption among our members."

The promise of CBDC: Use cases and potential

The digital rupee, or e₹, is India’s CBDC. It is the digital form of the rupee (₹). It is issued by the RBI in digital form and offers features similar to physical cash such as convenience of use, guarantee of RBI and finality of settlement.

It can be held and transacted through e₹ wallets offered by banks and non-banks for person-to-person (P2P) payments or person-to-merchant (P2M) transactions. Payments can be made by scanning either the CBDC QR code or the UPI QR code available at the respective merchant location.

"Currently, opening of e₹ wallets is linked to user’s saving accounts. This linkage facilitates frictionless user onboarding and obviates the need for separate KYC requirement. Based on the feedback and emerging use cases, new models of user on-boarding are also being explored," the website says. There are no charges or fees associated with using e₹ or e₹ wallets.

The RBI launched a pilot for the e₹ in December 2022 but adoption has been slower than expected. However, with payments firms now involved, there is potential for greater uptake in the coming months.

Its offline use cases are also being explored. "The offline feature of e₹ enables the user to transact in locations with limited or no internet connectivity. It is expected to mirror the advantages of physical cash, making it a reliable solution for usage in remote areas." the RBI website says.