CBDC-Based Public Distribution System: Digital Rupee Reform in PDS Gujarat

The Government of India has launched a Central Bank Digital Currency (CBDC)-based Digital Food Currency pilot in Gujarat.

• The initiative will enhance awareness of entitlements, simplify access, and strengthen accountability in the delivery of subsidised foodgrains to eligible beneficiaries.

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About CBDC-based Public Distribution System

• Key Collaboration: Ministry of Consumer Affairs, Food & Public Distribution, Reserve Bank of India, Government of Gujarat
• Issuance of Digital Coupons: 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’ digital wallets will carry programmable Digital Rupee, enabling seamless QR code-based or coupon code-based transactions.
• Role of Fair Price Shops: Beneficiaries can redeem their entitled quantity of foodgrains at Fair Price Shops (FPS) using CBDC coupon or voucher codes.

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Significance

• e-Governance: The system will address challenges related to biometric authentication and e-POS operational issues while ensuring secure, traceable and real-time transactions.
• Extension of Digital India: It represents an important extension of the Digital India vision into the Public Distribution System
• Promoting Good Governance: It would further strengthen the Government’s vision of ‘Minimum Government, Maximum Governance’, ensuring beneficiaries receive their entitled food grains with greater transparency and awareness of rights.
• FPS Dealers Benefits: Fair Price Shop dealers will also receive their margins on a real-time basis, creating a mutually beneficial ecosystem.

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