RBI’s Initiative for Programmable and Offline Retail CBDCs

Attention India
4 Min Read

The Reserve Bank of India (RBI) is set to revolutionize digital payments with its plan to introduce additional functionalities in Central Bank Digital Currencies (CBDCs). One of the key enhancements includes programmability in retail CBDC payments, aimed at facilitating transactions for specific or targeted purposes. Additionally, the RBI aims to enable offline capabilities to support transactions in areas with poor or limited Internet connectivity.

What are The Advantages of Programmability?

Programmability in CBDCs will offer various advantages to users across different sectors, including government agencies and corporations. By incorporating programmable features, payments can be directed towards defined benefits, ensuring transparency and accountability. For example, government agencies can ensure that payments are allocated for specific welfare programs, while corporations can control expenditures such as business travel for employees.

Know About The Features of Programmable CBDCs

The programmable nature of CBDCs will allow for the customization of various parameters, such as validity periods and geographical restrictions. This flexibility enables tailored use cases, enhancing the utility of CBDCs in diverse scenarios.

Offline Functionality

Recognizing the importance of accessibility, especially in regions with limited connectivity, the RBI is working on integrating offline functionality into CBDC transactions. This initiative aims to ensure that users can conduct transactions even in areas with poor Internet infrastructure.

Testing Offline Solutions

To achieve offline functionality, the RBI plans to test multiple solutions, both proximity-based and non-proximity-based. These tests will be conducted across various terrains, including hilly areas, rural regions, and urban centres. By experimenting with different approaches, the central bank aims to identify the most effective offline solutions.

Gradual Introduction

The implementation of offline capabilities will be carried out through pilot programs in a phased manner. This gradual approach allows for thorough testing and refinement before the widespread adoption of offline CBDC transactions.

Industry Perspectives

Experts and industry leaders have welcomed RBI’s initiative, recognizing its potential to address existing challenges and unlock new opportunities in digital payments.

Enhancing Use Cases

Ranadurjay Talukdar, Partner and Payments Sector Leader at EY India, highlights the significance of expanding CBDC use cases beyond traditional payment scenarios. By introducing features like offline functionality and purpose-specific payments, CBDCs can offer innovative solutions for diverse needs, including efficient distribution of government subsidies in remote areas.

Addressing Fungibility Concerns

Deputy Governor T Rabi Sankar addresses concerns regarding the impact of programmability on the fungibility of CBDCs. While acknowledging the temporary suspension of fungibility during programmed transactions, Sankar emphasizes the importance of providing users with control and flexibility over their expenditures.

Industry Endorsement

Rahul Jain, CFO of NTT DATA Payment Services India, lauds RBI’s initiative for programmable and offline CBDCs, citing its potential to enhance transaction speed, security, and convenience. The introduction of programmable features and secure offline options is expected to bolster India’s fintech ecosystem.


RBI’s pilot programs for programmable and offline retail CBDCs represent a significant step towards enhancing the efficiency and inclusivity of digital payments in India. By incorporating innovative features and addressing connectivity challenges, these initiatives aim to empower users and drive the evolution of the country’s financial landscape.

-Prisha Jaiswal

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