E-Rupee Pilot: Legal Framework and Privacy Concerns Under Indian Law
India's Reserve Bank has been issuing the digital rupee (e-Rs) since November 2022, marking an unprecedented use of government-backed legal tender in digital form. The 1934 RBI Act, originally drafted for paper currency and coins, required legislative amendments to accommodate tokens on mobile phones and blockchain-derived wallets.
The Government announced the CBDC in February 2022, with RBI amendments notified in March 2022. A wholesale pilot began in November 2022, followed by a retail pilot in December 2022 across four cities and banks. The retail pilot has since expanded to 19 banks and fintech entities, with circulation growing from Rs 103 crores in December 2023 to over Rs 1016 crores by March 2025.
Key concerns include privacy implications under constitutional protections, data protection gaps, programmability features, and regulatory uncertainties that must be addressed before wider rollout.
