India's digital currency, which took a long time to develop, has turned out to be unclaimed. According to Reuters, citing competent sources, the authorities' efforts to introduce the digital rupee have been in vain.
Analysts estimate that daily transactions using digital rupees have dropped tenfold. This plunge came after the Reserve Bank of India artificially boosted usage to its target of 1 million retail transactions per day through agreements with commercial banks.
Notably, the central bank launched a pilot for the national virtual currency in December 2022. The following year, the RBI reported success, driven by demand from retail users. In addition, a portion of bank employees' salaries were paid in the e-rupee.
However, the external motivation eventually waned, with demand for the digital currency plummeting. Some transactions in digital rupees persisted as banks continued to use the asset for certain benefit payments.
According to Reuters, the RBI has now stopped artificially stimulating transaction growth. The regulator is currently focused on developing use cases for the digital currency and testing the technology, hoping for a gradual increase in demand.
Experts note that many central banks face similar challenges when trying to introduce virtual currencies. The difficulty lies in financial institutions' inability to convey the value and benefits of such a payment method over physical cash to consumers.
From June 17 to 23, the rupee hit an all-time low against the US dollar, falling to 83.6512 rupees. The Indian regulator tried to prevent sharp price swings, but the dollar’s rally was too strong. As a result, the rupee lost ground across the board.