When people talk about a "digital rupee," they usually picture a wallet on a phone. But some of the most consequential CBDC work happening today will never appear on a consumer screen at all. It runs quietly between banks, clearing houses and central banks, and it could reshape how trillions move through the financial system.
That is the difference between retail CBDC and wholesale CBDC. They share a name and an issuer, but they solve very different problems. If you work in banking, fintech, treasury or public policy, understanding that difference is no longer optional.
Two kinds of central bank digital money
The Reserve Bank of India's Concept Note on CBDC classifies digital currency into two broad categories:
- Retail CBDC (CBDC-R): available to everyone, individuals and businesses, for everyday payments. Think of it as a digital version of cash.
- Wholesale CBDC (CBDC-W): restricted to banks and selected financial institutions, used for interbank settlement and financial market transactions.
Both are liabilities of the central bank. Both are denominated in the national currency. What differs is who can hold them, what they are used for, and what problems they fix.
Retail CBDC: digital cash for everyone
Retail CBDC is designed for the public. Its core promise is to give ordinary people direct access to central bank money in a digital world where physical cash is used less and less.
What retail CBDC is good at
- Everyday payments between people and merchants.
- Offline transfers where connectivity is weak.
- Targeted disbursements such as subsidies and welfare that must reach the right beneficiary.
- Financial inclusion, giving people with basic phones a safe, sovereign store of value.
How India has tested it
India's retail pilot, e₹-R, began on 1 December 2022 with four banks in four cities and has expanded since. Key developments include:
- An offline e₹ capability unveiled at the Global Fintech Fest in October 2025, allowing device-to-device payments without internet.
- Programmable CBDC for food subsidies, where public distribution system beneficiaries in Gujarat, Puducherry and Chandigarh received benefits redeemable only for eligible goods, as described in the RBI's Annual Report 2025-26.
Retail circulation was reported at about ₹771.7 crore at the end of March 2026, down from about ₹1,016.5 crore a year earlier, a sign that the programme is moving from incentive-driven adoption toward focused use cases.
The design challenges
Retail CBDC is hard because it touches millions of people directly. It must balance:
- Privacy for everyday users.
- Usability that rivals already-excellent systems like UPI.
- Resilience at population scale.
- The role of banks, so deposits do not flee to central bank wallets in times of stress.
That last point is why most countries, including India, follow a two-tier model: the central bank issues, while banks and approved entities distribute and serve customers.
Wholesale CBDC: rebuilding the plumbing
Wholesale CBDC is not about consumers. It is about the settlement layer that sits underneath every large financial transaction.
Today, when banks settle with each other, they usually use reserves held at the central bank through real-time gross settlement systems. That works well domestically during operating hours. But problems appear when:
- Assets and cash live on different systems, creating settlement risk.
- Transactions cross borders, requiring chains of correspondent banks.
- Markets want to operate 24/7, while settlement infrastructure does not.
- Assets become tokenised, requiring a matching tokenised settlement asset.
Wholesale CBDC offers a way to put central bank money onto programmable platforms, where it can settle atomically against tokenised securities or foreign currencies.
How India has tested it
India's wholesale pilot, e₹-W, launched on 1 November 2022, initially for settling secondary market transactions in government securities, with nine banks identified to participate.
More recently, the RBI developed the Unified Markets Interface (UMI), a multi-layer platform for tokenising financial assets. A pilot for issuing and trading certificates of deposit in tokenised form, with settlement in wholesale CBDC, has begun on it. This is exactly the kind of use case where wholesale CBDC shines: an asset and its payment moving together on the same programmable infrastructure.
Global wholesale experiments you should know
Wholesale CBDC is where international collaboration has been most intense. Three projects are especially instructive.
Project mBridge
mBridge is a multi-CBDC platform for real-time, peer-to-peer cross-border payments and foreign exchange transactions. It was initiated by the BIS Innovation Hub in 2021 with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China and the Central Bank of the UAE. The Saudi Central Bank joined in 2024, and the platform reached the minimum viable product stage in mid-2024.
In October 2024, the BIS announced it was handing the project over to its central bank partners, describing mBridge as mature enough to continue without BIS leadership. The project illustrates both the promise of shared multi-currency ledgers and the governance questions that arise when many jurisdictions share one platform.
Project Agorá
Project Agorá, led by the BIS with the Institute of International Finance, explores how tokenised commercial bank deposits and tokenised central bank reserves can operate together on a shared programmable platform. It brought together seven central banks and more than 40 regulated financial institutions.
Its report, published on 27 May 2026, concluded that the prototype successfully showed tokenised deposits can be combined with the safety of tokenised central bank reserves, enabling atomic, multi-currency and always-on settlement. Crucially, smart contracts allow institutions to embed workflow logic, compliance requirements and conditional payment triggers directly into transactions.
Agorá is significant because it does not replace banks. It upgrades correspondent banking by giving it a programmable, shared foundation.
Project Rosalind
On the retail side, Project Rosalind, a collaboration between the BIS and the Bank of England, explored how an API layer could connect central bank infrastructure with private sector services. It developed 33 API functionalities and explored more than 30 retail CBDC use cases, reinforcing the idea that the private sector, not the central bank, should build customer-facing innovation.
Side by side: retail vs wholesale
Here is a simple way to compare the two.
Who holds it
- Retail: individuals, households, merchants, small businesses.
- Wholesale: banks, financial institutions, sometimes large corporates.
Typical transaction
- Retail: a ₹200 grocery payment, a subsidy credit, a peer transfer.
- Wholesale: a crore-scale bond settlement, an interbank FX trade, a tokenised deposit transfer.
Main problem it solves
- Retail: access to safe central bank money, inclusion, offline resilience, targeted disbursement.
- Wholesale: settlement risk, cross-border friction, 24/7 markets, tokenised asset settlement.
Biggest design challenge
- Retail: privacy, user experience, bank disintermediation.
- Wholesale: interoperability, legal finality, governance across institutions and borders.
Where programmability matters
- Retail: purpose-bound money, expense controls, conditional disbursements.
- Wholesale: delivery-versus-payment, payment-versus-payment, automated compliance.
Why the line between them is blurring
In practice, the two models are converging in interesting ways.
Tokenised deposits bridge the gap. Projects like Agorá show that commercial bank money can become programmable while still settling in central bank money. This lets retail and corporate customers benefit from wholesale innovation without holding CBDC directly.
Programmability flows both ways. The same smart-contract logic that settles a tokenised bond can release a supplier payment or a subsidy.
Cross-border retail depends on wholesale rails. When someone sends money abroad, the retail experience is only as fast as the settlement underneath it.
Corporates sit in the middle. Large enterprises need retail-like simplicity with wholesale-grade settlement. That hybrid space is where much of the commercial opportunity lies.
What this means for banks, fintechs and enterprises
For commercial banks, CBDC is not a threat to be managed but an infrastructure upgrade to be adopted. Retail CBDC reinforces the bank's role as distributor and customer touchpoint. Wholesale CBDC removes batch processing, shrinks reconciliation windows and reduces float risk.
For fintechs, the opportunity is to build on the currency itself. APIs and SDKs that expose CBDC capabilities, such as conditional payments, escrow and instant settlement, make it possible to design products that cannot exist on legacy rails.
For enterprises, the prize is operational. Imagine invoices that settle the moment goods are verified, treasury positions visible in real time across banks and ledgers, and cross-border supplier payments that do not wait days for correspondent chains.
For governments and central banks, the two tiers work together: retail CBDC delivers public money directly and transparently, while wholesale CBDC modernises the markets that fund public and private investment.
The hard part: interoperability
Whether retail or wholesale, CBDC delivers its full value only when systems can talk to each other. A tokenised certificate of deposit issued on one ledger needs to settle against cash on another. A bank's core system needs to reconcile against a DLT platform. A cross-border payment needs to move between two sovereign networks with different rules.
This is where the industry's biggest engineering challenges now sit, and where thoughtful architecture makes the difference between isolated pilots and a connected financial system.
How E1 approaches both tiers
E1 is building CBDC-based financial infrastructure designed to serve both sides of this divide.
For central banks, our vision includes direct-to-citizen digital currency, DLT-based interbank settlement infrastructure, and programmable rules at the currency level.
For commercial banks, E1's approach is designed around the two-tier model: banks receive CBDC issuance and remain the primary distribution and customer touchpoint, while the complex ledger integration stays behind a familiar, branded experience.
For fintechs and developers, we are designing a Currency as a Platform model, with APIs and SDKs that treat CBDC as a programmable rail supporting atomic settlement and conditional, UTXO-based tokens that can carry spend rules, expiry and escrow conditions.
And tying it together is Datachain, E1's interoperability layer, designed so that value and data can move across heterogeneous ledgers such as Hyperledger Fabric, Corda, Quorum and public chains.
Retail CBDC puts sovereign money in people's hands. Wholesale CBDC rebuilds the plumbing beneath it. E1's vision is to connect both, so that the safety of central bank money reaches every transaction, from a village grocery payment to a cross-border bond settlement.
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