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HDFC Bank, the country’s largest private sector lender, has become the first commercial bank to implement interoperability between United Payment Interface (UPI) and Central Bank Digital Currency, starting Thursday.
The move comes days after Reserve Bank of India (RBI) deputy governor T Rabi Sankar said such interoperability will be implemented in July.
“HDFC Bank today announced the launch of UPI QR code interoperable with India’s sovereign digital currency, Central Bank Digital Currency (CBDC). With this, HDFC Bank becomes one of the first banks in the country to complete the integration process,” said the lender in a statement.
HDFC Bank customers can transact money available in their CBDC wallet across UPI QR code and there will be no need to scan different QR codes at the same merchant.
“The interoperable UPI QR code allows HDFC Bank merchants who have been onboarded on the bank’s CBDC platform, to accept payments from their customers in the form of Digital Rupee currency, boosting usage of CBDC in day-to-day transactions,” said HDFC Bank.
HDFC Bank will facilitate payments in Digital Rupee in Mumbai, Delhi, Chandigarh, Bhubaneswar, Bengaluru, Ahmedabad, Guwahati, Gangtok and other cities.
“CBDC is a forward-looking initiative and its QR interoperability with the already accepted and widely popular UPI is going to prove greatly beneficial to its usage,” said Parag Rao, country head–payments, consumer finance, technology & digital banking, HDFC Bank.
RBI has started a pilot on CDBC on the wholesale side on November 1, 2022. Retail testing started on December 1. RBI aims to increase the daily transaction volume of CDBC retail to 1 million by the end of 2023, as compared to 5,000-10,000 now.
UPI, the most popular digital payment mode in the country, has 31 crore transactions daily.
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