HDFC Bank, recognized as India’s largest private sector bank has accomplished an extraordinary feat by achieving interoperability between the United Payment Interface (UPI) and Central Bank Digital Currency (CBDC). Thanks to this remarkable stride forward HDFC Bank customers can now seamlessly carry out transactions using their CBDC wallet through UPI QR codes. This advancement serves as an impetus for increased utilization of digital currency in routine monetary exchanges.
HDFC Bank, the largest private sector lender in India has taken a significant step by introducing interoperability between United Payment Interface (UPI) and Central Bank Digital Currency. This makes HDFC Bank the first commercial bank in the country to achieve this integration.
The decision comes shortly after T Rabi Sankar, Deputy Governor of the Reserve Bank of India (RBI). Stated that such interoperability would be implemented in July.
Making this announcement. HDFC Bank mentioned that it is now offering UPI QR code interoperability with Indias’ sovereign digital currency Central Bank Digital Currency (CBDC). By doing so HDFC Bank has completed the integration process ahead of other banks in India.
Under the CBDC pilot program more than 100,000 customers and 170,000 merchants have been associated with HDFC Bank.
Now HDFC Bank customers can conveniently transact money from their CBDC wallet using UPI QR codes. Eliminating the need to scan multiple QR codes from different merchants. Merchants will only need to display one QR code at their stores or via the acquiring banks mobile application without having to change their existing ones.
In an effort to boost the usage of CBDC in daily transactions, HDFC Bank mentioned that its merchants who are onboarded on its CBDC platform will be able to accept payments from customers in Digital Rupee currency through the interoperable UPI QR code.
Furthermore, HDFC Bank will facilitate payments in Digital Rupee across several cities including Mumbai, Delhi, Chandigarh, Bhubaneswar, Bengaluru, Ahmedabad Guwahati, and Gangtok.
Parag Rao, Country Head – Payments, Consumer Finance, Technology & Digital Banking at HDFC stated that this initiative combining CBDC with UPI is forward-looking and greatly beneficial for its usage.
The RBI had initiated a pilot on CDBC on November 1st, 2022 specifically focused on the wholesale side. On December 1, retail testing was officially launched.
RBI has outlined its objective to propel CDBC retail towards exponential growth with a target accomplishment of processing a whopping daily volume amounting to one million transactions by the end of 2023; indeed an impressive leap from its current range that spans between approximately five thousand and ten thousand transactions.
Notably, UPI claims its dominance as India’s preferred digital payment mechanism with a remarkable statistic—an enormous thirty-one crore transactions conducted each day.
