In a significant development, E-RUPI, also known as Central Bank Digital Currency (CBDC), is poised to redefine the dynamics of digital currency, particularly in the realm of international money transfers. Ajay Seth, the Secretary of Economic Affairs, shed light on the transformative potential of E-RUPI at the Ministry of Finance last Friday.
Digital Currency Impact
E-RUPI, functioning as a digital currency with legal status, has the potential to reshape the landscape of cross-border transactions, particularly in terms of remittances. The emergence of CBDC brings with it a range of benefits that promise to make money transfers to and from Videsh more affordable and efficient.
Cost of Sending Money from Abroad
Annually, approximately $100 billion is transferred to India from abroad. The current cost of sending money from overseas hovers around 5%. E-RUPI is expected to act as a cost-efficient alternative, potentially reducing the remittance cost to a range of 2-3%. This significant reduction could have widespread positive implications for individuals and businesses engaged in international fund transfers.
Ease of Use
CBDC, in the form of E-RUPI, simplifies the process of sending money from overseas to India. Its versatile nature allows for utilization in various cross-border payments, offering users a streamlined and user-friendly experience.
Global Transactions
The global average cost of transferring money from one country to another is approximately 8-9%. E-RUPI aims to substantially decrease this cost, making global transactions more affordable and accessible. The potential economic impact of this reduction could be substantial, fostering economic growth and financial inclusion.
Launch and Implementation
The Union Budget 2022-23 marked the official announcement of CBDC, with Finance Minister Nirmala Sitharaman unveiling the groundbreaking initiative. The pilot project for E-RUPI commenced on December 1, 2022, paving the way for full-scale implementation.
Collaboration and Security
The launch of E-RUPI was made possible through a collaboration between the Indian National Payment Corporation, the Finance Service Department, the National Health Authority, and the Ministry of Health and Family Welfare. The underlying technology ensures secure and confidential transactions, prioritizing user privacy.
Anticipated Benefits
The widespread adoption of E-RUPI is anticipated to yield substantial benefits for individuals sending money to India from abroad. With the potential to save billions of dollars annually, E-RUPI represents a significant step towards establishing a more efficient and cost-effective system for cross-border transactions.
In summary, E-RUPI stands poised to revolutionize the landscape of international fund transfers, providing an innovative and secure solution for users worldwide.
