India is accelerating its transition to a digital rupee future as policymakers and technology companies seek new ways to integrate blockchain systems with the country’s burgeoning payments infrastructure. The rise of e₹, tokenized rupees, and rupee-denominated stablecoins signals a major shift in India’s financial structure.
This change also puts blockchain networks like Polygon in a strong position to support future domestic and cross-border payment flows. This momentum reflects a broader strategy to modernize financial rails, strengthen liquidity and connect India’s digital economy with global markets.
India is moving towards a digital rupee economy. Can be supported with polygon rails.
Read our payments head @0xAishwary’s take on how tokenized rupees, INR stablecoins, and e₹ (India’s digital rupee) can work together to benefit the Indian economy from within. pic.twitter.com/HwIvuTLWME
— Polygon (@0xPolygon) November 13, 2025
A new layer in India’s digital payments stack
India has built a strong foundation for digital payments over the past decade. UPI has turned remittance into a simple everyday action and promoted widespread digital inclusion.
The transaction amount in October reached over 20 billion, showing a certain level of demand. ONDC also promoted India’s open commerce vision and encouraged new ideas for public digital infrastructure.
Now, the focus has shifted beyond payments. Policymakers want a programmable layer to extend India’s existing systems into a blockchain environment. e₹ already supports instant value transfers between banks, retailers, and individuals.
Additionally, wholesale pilots are currently testing trade finance and programmable payments. Banks like ICICI Bank and HDFC Bank are experimenting with on-chain credit flows to eliminate payment lag.
Role of Tokenized Rupee and INR Stablecoins
A tokenized rupee can connect traditional finance and blockchain markets. These work like stablecoins, but with the trust of central bank backing. This structure allows businesses to settle payroll, supplier transactions, and digital loans within a unified digital environment. Additionally, regulated banks can issue and redeem rupee tokens on public blockchains while maintaining oversight.
At the same time, the INR stablecoin can handle cross-border flows. These could support global trade corridors and allow exporters to settle transactions quickly. According to reports, some Indian companies are considering developing stablecoins backed by government securities. This structure provides a regulated path for on-chain payments that complements the e₹ ecosystem.
India eyes new regional corridors
India is also planning deeper regional integration. The corridor between the RBI and the UAE Central Bank provides an early example. Similar ties could link India with Indonesia, Kenya and other partners seeking neutral settlement currencies.
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