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CBDC vs UPI: RBI Governor Shaktikanta Das Explains The Difference

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Batori24 Bureau
Batori24 Bureau
Batori24 is a Vernacular based Assamese news portal based in Guwahati Assam. We are a dedicated news channel covering news and stories across the globe with special reference to Assam, north-east along with National and International news.

CBDC vs. UPI: The Reserve Bank of India (RBI) held a press conference on Wednesday to discuss the final Monetary Policy Committee (MPC) meeting of the fiscal year.

RBI MPC Meet 2022: The Reserve Bank of India (RBI) held a press conference on Wednesday to discuss the final Monetary Policy Committee (MPC) meeting of the fiscal year. While the Central Bank raised the repo rate by 35 basis points (bps) to 6.25 percent, it also provided clarification on a number of issues, including the concept of Central Bank Digital Currency (CBDC).

Also Read: RBI hikes repo rate, GDP growth estimate lowered

When the RBI decided to launch its CBDC for both retail and wholesale transactions, the e-rupee became the talk of the town. Despite the fact that both CBDC-R and CBDC-W were launched in less than a month, several questions have been raised about their differences and similarities with the Unified Payments Interface (UPI), data security, and other aspects.


UPI applications have recently emerged as one of the most popular payment methods in the country. On the other hand, the e-rupee has become the talk of the town after the RBI launched CBDC-R and CBDC-W in less than a month.

CBDC vs UPI – The Difference As Per RBI Governor :

According to the official website of the National Payments Corporation of India (NPCI), “UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing, and merchant payments into one hood.”

The RBI Governor made a similar point. He stated that a bank is involved in the intermediation of a UPI transaction. “When I use UPI app,” he explains, “a message goes to my bank, the account is debited, and the money is transferred to the recipient’s account, where it is credited – all through the bank’s intermediation.”

However, Das claims that CBDC (e-rupee in this case) is very similar to paper currency. “Say you withdraw Rs 1,000 notes and keep them in your purse,” he explains. You must now go to the shop and pay Rs 500, so take it out and pay. Even at CDBC, you can withdraw digital currency and store it in your wallet, which is essentially your phone. So, when you go to make a payment in a store or to another person, it will go directly from your wallet to his wallet, bypassing the bank.

In layman’s terms, UPI is simply an interface for making monetary transactions between two bank accounts, or from an account to a digital wallet, or from a digital wallet to an account. The Digital Rupee, on the other hand, is simply another type of currency, similar to fiat currency.

How to get Digital Rupee? 

Users can purchase digital currencies from RBI-approved banks, according to RBI guidelines. The RBI has partnered with four banks in the first phase: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank.

Users must go to the official app or website of any of the four designated banks to purchase e-rupee or e from issuing banks even if they do not have a bank account with the lender. While digital in nature, the e-rupee would have physical cash features.


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