Since Bitcoin was invented the they have been countless articles on decentralization and proof of work and why Bitcoin is better as store of value while allowing a decent level of privacy doing transactions . While this will hold true at Bitcoins market capitalization of $1.2 Trillion dollar it would be, the Indian Government backed e-Rupee begs to differ, and it would seem so as Bitcoin alone cannot manage the online ecosystem of the largest population in the world with the largest workforce while having the largest workforce in the world.
The E-rupi as described by the Indian governments NPCI ( National Payments Corporation of India)
"National Payments Corporation of India (NPCI) in association with Department of Financial Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), and partner banks, has launched an innovative digital solution – ‘e-RUPI’.
The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the merchants accepting e-RUPI. e-RUPI would be shared with the beneficiaries for a specific purpose or activity by organizations or Government via SMS or QR code.
This contactless e-RUPI is easy, safe and secure as it keeps the details of the beneficiaries completely confidential. The entire transaction process through this voucher is relatively faster and at the same time reliable, as the required amount is already stored in the voucher."
As of now the only digital payment system in India is a protocol developed by the NPCI called the UPI- United payments Interface. This is the largest protocol in the whole world that processes over 10 Billion transactions on a monthly basis with a year-on year growth of over 40%.. The average monthly transaction value reaches a whopping $200 Billion dollars. The UPI protocol is enabled for 3000 transactions per second but can be scaled infinitely.
But there are some pitfalls to the UPI interface, firstly their is no privacy whatsoever, the transaction are bank account to bank account and though instantaneous they lack that material value of a digital currency that is inherent in physical monies. i.e Personal money is personal money, and most times people do not wish to know names of the person they buy an item from. Customer details and data gets released to the seller, this includes e-mail address, online id, name. This data breach if evaluated can be to the tune of billions of rupees.
This is where the E-Rupi comes into effect. the e-Rupi is in development and has all the national banks, private banks and some public sector payments processors such as Paytm pay, Amazon Pay, and Google Pay on board. The E-rupi is basically a voucher, i.e it cannot be minted without someone buying the voucher much like a stable coin, one has to transfer a digital rupee through upi or make a cash deposit to avail the E-Rupi.
For Companies
- Corporate can enable well-being of their employees
- End to end digital transaction and doesn’t require any physical issuance hence leading to cost reduction
- Voucher redemption can be tracked by the issuer
- Quick, safe & contactless voucher distribution
For Consumers
- Contactless - Beneficiary should not carry a print out of the voucher
- Easy redemption - 2 step redemption process
- Safe and Secure - Beneficiary doesn’t need to share personal details while redemption hence privacy is maintained
- No digital or bank presence required - Consumer redeeming the voucher need not have a digital payment app or a bank account
For Merchants
- Easy & Secure - Voucher is authorized via a verification code
- Hassle free & Contactless payment collection - Handling of cash or cards is not required
- Quick redemption process - The voucher can be redeemed in a few steps and lesser decline due to pre-blocked amount.
This makes sense when one thinks of a CBDC that could work, however there is still much to know about E-Rupi and whether it will be a truly decentralized currency with collateral is yet to be known. The Indian Government is still working on blockchain based cryptocurrency with privacy enabled.
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