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India is making significant strides in its digital currency pilot program, now incorporating programmability and offline payment capabilities into its digital rupee.

Since the beginning of last year, India has been conducting trials of a retail Central Bank Digital Currency (CBDC), facilitating transactions between individuals and merchants. Recently, the program reached a milestone of processing a million transactions per day.

The Reserve Bank of India (RBI) is now taking the initiative further by introducing programmability features, allowing for transactions tailored to specific and targeted purposes.

During a press conference, RBI officials provided an example of how businesses could program funds for designated expenditures, such as employee travel expenses.

Addressing concerns about fungibility, Deputy Governor T Rabi Sankar illustrated with another scenario: a school grants a student funds specifically for purchasing books from a store. While the funds are earmarked for this purpose initially, they regain fungibility once received by the store.

In addition to programmability, the RBI is also exploring offline functionality, recognizing the importance of ensuring that the digital rupee remains usable in areas with limited or unreliable internet connectivity. Various pilot programs will be conducted in regions with challenging terrain, such as mountainous areas, to test different offline options.

These developments mark a significant advancement in India’s efforts to modernize its payment infrastructure and promote financial inclusion through digital means. By incorporating programmability and offline capabilities into its CBDC, India aims to create a versatile and accessible digital currency that can adapt to diverse usage scenarios and environments.