India Launches First CBDC-Based Public Distribution System
India's first public distribution system (PDS) based on a central bank digital currency (CBDC) has been launched in Gujarat. The system combines payments via the e-rupee with 24x7 "Annapurti" grain ATMs. This initiative reflects a broader government priority to digitize last-mile delivery and payment infrastructure.
- The pilot phase of this initiative covers 26,333 families across four districts in Gujarat: Ahmedabad, Surat, Anand, and Valsad. - Beneficiaries receive "programmable" digital food coupons, a form of the e-rupee, directly to their mobile wallets, which can only be redeemed for specific food grains. This system is designed to eliminate issues like fingerprint mismatches previously faced with e-POS biometric authentication. - The system was developed by Punjab National Bank in collaboration with the Government of India and the Reserve Bank of India. - The "Annapurti" grain ATM was conceptualized and designed by the UN World Food Programme (WFP) in India and can dispense up to 25 kilograms of grain in as little as 35 seconds. - Transactions for smartphone users are authenticated via QR codes, while feature phone users will utilize an Aadhaar-based OTP verification system. - This launch is part of a broader RBI pilot for the digital rupee that began in late 2022, initially focusing on wholesale transactions before expanding to retail use cases. - Fair Price Shop dealers will benefit by receiving their margins on a real-time basis upon transaction completion, improving financial efficiency. - Following the Gujarat pilot, the government plans to expand the CBDC-based PDS to the Union Territories of Chandigarh, Puducherry, and Dadra & Nagar Haveli and Daman & Diu.
