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UPI QR Code-Central Bank Digital Currency interoperability

Facts for Prelims (FFP)


Source: IE

 Context: Several Indian banks, have initiated interoperability between the Unified Payments Interface’s (UPI) Quick Response (QR) codes and their central bank digital currency (CBDC) or e₹ applications.

  • This integration allows users of the retail digital rupee to perform transactions by scanning any UPI QR code at a merchant outlet, simplifying payments for customers and merchants.

 The digital rupee, issued by the RBI, is a tokenized digital version of the rupee, stored in a digital wallet linked to a customer’s savings bank account.

This move aims to increase the adoption of the digital rupee by leveraging the widespread use of UPI.


About Interoperability: 

As defined by the Reserve Bank of India (RBI), it enables a payment system to work seamlessly with other payment systems. In this context, it means that all UPI QR codes are compatible with CBDC apps, eliminating the need for separate QR codes for transactions.