The Government of India has launched a Central Bank Digital Currency (CBDC)-based Digital Food Currency pilot in Gujarat.
The initiative has been launched by the Government of India in collaboration with the Reserve Bank of India and the Government of Gujarat under the Public Distribution System in Ahmedabad, Anand, Valsad and Surat districts. As part of its scale-up strategy, subsequent phases will extend to the Union Territories of Puducherry, Chandigarh, and Dadra & Nagar Haveli and Daman & Diu.
CBDC-based Digital Food Coupon: How to redeem entitled quantity of foodgrains? Explained
Under the CBDC framework, digital coupons generated through the Reserve Bank of India will be credited directly to beneficiaries as programmable digital currency (e₹).
Beneficiaries can redeem their entitled quantity of foodgrains at Fair Price Shops (FPS) using CBDC coupon or voucher codes.
The system will address challenges related to biometric authentication and e-POS operational issues while ensuring secure, traceable and real-time transactions.
Under the CBDC-enabled system, beneficiaries’ digital wallets will carry programmable Digital Rupee, enabling seamless QR code-based or coupon code-based transactions at Fair Price Shops for purchase of entitled foodgrains.
CBDC-enabled system eliminates process of repeated biometric authentication
The system eliminates repeated biometric authentication, improves transaction efficiency, and generates a real-time digital trail, thereby enhancing transparency, monitoring and accountability. Fair Price Shop dealers will also receive their margins on a real-time basis, creating a mutually beneficial ecosystem.
Over the past several years, the Department of Food and Public Distribution has undertaken extensive digital transformation of India’s food security ecosystem.
Key initiatives include end-to-end digitisation of ration cards and nationwide portability under the One Nation One Ration Card (ONORC) framework, deployment of e-POS devices for Aadhaar-enabled authentication and real-time transaction capture, and implementation of data-driven validation through the Rightful Targeting Dashboard. Digital supply-chain optimisation through Ann Chakra and strengthened grievance redressal mechanisms such as Ann Sahayata have further enhanced transparency, efficiency and citizen-centric service delivery.
The pilot, which began with a limited number of beneficiaries, is expected to mark a transformative step towards integrating technology with welfare delivery, strengthening transparency and building a more efficient and accountable governance framework for last-mile service delivery, Ministry of Consumer Affairs, Food & Public Distribution said.
