Central Bank Digital Currencies (CBDCs) are no longer theoretical. From the Bahamas’ Sand Dollar to Jamaica’s Jam-Dex, and Nigeria’s eNaira to India’s e-Rupee, countries of the Global South are experimenting with new forms of digital money. Among them, the Reserve Bank of India (RBI) pilot has attracted particular attention. By March 2025, more than 6 million users and 420,000 merchants had tried the e-Rupee, with circulation rising 334% in a year to $122 million—making it the second-largest CBDC pilot globally (Atlantic Council CBDC Tracker, 2025). Yet, beneath the numbers lies a paradox: while India is a pioneer in CBDC policy, mass adoption in retail has lagged behind its wildly successful Unified Payments Interface (UPI), which already processes billions of transactions monthly (BIS, 2024).
For the Global South, where financial exclusion and patchy digital infrastructure remain pressing challenges, India’s journey is less about competing with existing systems and more about finding unique value propositions.
A snapshot of official Reserve Bank of India data illustrates this dynamic. Total e₹ in circulation rose from ₹16.4 crore in March 2023 to ₹234.1 crore in March 2024 and is projected to reach ₹1,016.5 crore by March 2025—a nearly 62-fold increase in two years. Retail CBDC (e₹-R) drives this surge, while wholesale CBDC stagnates. Usage has shifted toward higher denominations: by 2024, the ₹500 note made up 70.2% of retail circulation, projected to rise to 84.4% in 2025. By volume, smaller denominations dominated early use, but by 2025 the ₹500 unit is expected to account for more than a third of all pieces in circulation. This reflects how the e-rupee has moved beyond small-value transactions to become a common instrument for larger, everyday payments.
Beyond Payments: Policy Precision and Inclusion
The real promise of the e-rupee has not been as another payment option but as a tool for targeted policy delivery. India’s Subhadra Yojana welfare program in Odisha used programmable e-Rupee wallets to transfer benefits directly to 88,000 women, ensuring funds were spent as intended (Economic Times, 2024). For countries with high leakage in subsidy schemes, this case illustrates CBDC’s potential as a “precision instrument” for social impact.
Another breakthrough lies in offline capabilities. With 65% of rural Indians still relying on cash due to weak connectivity (PwC India, 2024), RBI is testing offline CBDC solutions. This matters for other Global South nations, where digital divides appear similar. CBDCs must first demonstrate their ability to replace cash before competing with advanced instant payment systems. As RBI Governor Shaktikanta Das put it, “The biggest potential for CBDC going forward will be cross-border money transfer” (Economic Times, 2023). He also spoke of “offline functionality in CBDC-R for areas with poor or limited internet connectivity” (Times of India, 2024). These comments show India’s CBDC vision is both ambitious and pragmatic, balancing long-term cross-border goals with immediate domestic needs.
The Trust Paradox
Public perception in India shows both high trust and high fear: 85% awareness of CBDCs, but over 70% cite cybersecurity concerns, and 44% worry about government surveillance (Journal of Information Systems Engineering and Management, 2024). This underlines a universal truth: trust is the currency of CBDCs. Legal frameworks on privacy and data governance must be built before scaling; otherwise, adoption risks stagnation.
Experiences from other Global South nations reinforce this point. In Nigeria, despite an early launch of the eNaira in 2021, adoption has been extremely low—less than 1% of the population use it regularly—due to poor awareness campaigns, distrust of government, and the dominance of mobile money (IMF, 2023).
Indonesia offers another cautionary tale: in 2025, public trust was shaken when the Financial Transaction Reports and Analysis Center (PPATK), Indonesia’s anti-money laundering and counter-terrorism financing agency and the key watchdog of financial transactions often seen as the spearhead of state surveillance, froze thousands of dormant bank accounts, citing links to terrorism financing and online gambling. The move triggered widespread anxiety and even small-scale bank runs, reinforcing suspicion toward centralized oversight. This perception matters for future CBDC adoption: if PPATK’s role is not clearly delimited and transparently communicated, citizens may see CBDCs as another layer of state surveillance, rather than an instrument of inclusion.
Beyond surveillance concerns, another key challenge is shifting public perception so that CBDCs are not conflated with cryptocurrencies, which in many contexts of the South are associated with speculation, gambling, and high risk. Building a clear narrative that CBDCs are fundamentally different—state-backed, stable, and designed for inclusion—will be critical to avoid confusion and skepticism.
For Global South nations, the lesson is clear—beyond regulation, strong grassroots outreach is essential. That outreach cannot rely on conventional top-down communication alone; it must involve informal leaders, community networks, and culturally resonant campaigns. Storytelling-based communication, gamified financial literacy programs, and trusted local figures—teachers, religious leaders, and cooperatives—can all play a role. Examples from other contexts strengthen this point: in Kenya, mobile money literacy campaigns relied on church groups and women’s savings collectives; in Brazil, digital inclusion initiatives leveraged football clubs and community radio to reach the unbanked. Pilots should begin with small but highly visible interventions—such as targeted subsidy disbursements or government aid—that build confidence from the bottom up. Building trust at the ground level is as important as building secure code at the top, and only by combining both can CBDCs achieve meaningful adoption.
Other Southern Experiments
The Bahamas stands as a global pioneer in retail CBDCs, launching the Sand Dollar nationally in October 2020. With over 700 islands, the country faced extremely high costs and logistical difficulties in distributing physical cash, especially in the aftermath of hurricanes that crippled banking infrastructure. The Sand Dollar was designed to provide reliable access to financial services for residents in remote islands and to strengthen resilience. Adoption challenges remain, but the initiative is recognized as a milestone and learning model for others.
Jamaica followed with the launch of Jam-Dex in mid-2022. The government offered an initial incentive of about US$16 to the first 100,000 citizens who opened Jam-Dex wallets (Bank of Jamaica, 2022; IMF, 2023). While this spurred some early interest, sustained adoption has been weak. Public misunderstanding, limited merchant acceptance, and a persistent preference for cash or existing digital payment options have slowed traction. The Jamaican case underlines that incentives alone cannot ensure lasting adoption without deeper trust, usability, and ecosystem readiness.
A Playbook for the South
One practical entry point for CBDC adoption in the Global South is starting with social assistance programs. By channeling government subsidies or welfare transfers through CBDC wallets, authorities can demonstrate tangible benefits to citizens and build trust through immediate, visible impact. Just as India’s pilots have shown, this approach tackles leakage and ensures aid reaches its intended recipients.
The Reserve Bank of India (RBI) has explicitly stated that one of the greatest potentials of the e-rupee is for Direct Benefit Transfer (DBT) programs. With the feature of “programmability,” CBDCs can be designed so that aid funds are restricted to specific uses (for example, buying fertilizer or food), drastically reducing leakage and misuse. Currently, the use of e-Rupee for DBT remains in the pilot stage, but the proof of concept is strong: India’s success in reducing subsidy corruption through its existing DBT system—using Aadhaar biometric identity and the UPI payment system—has demonstrated the effectiveness of direct digital payments. CBDCs are seen as the next evolutionary step to make the system even more efficient and tamper-proof.
Because digital and internet infrastructure remains uneven across much of the South, CBDC design must also allow transactions to be executed and recorded reliably even under poor connectivity conditions—or fully offline when necessary. These features transform CBDCs from a theoretical experiment into a practical solution for real-world challenges.
From India’s experience, five key lessons emerge for developing nations considering CBDCs:
- Define the problem first. If inclusion is the goal, prioritize offline CBDC. If subsidies are leaky, prioritize programmability.
- Design for differentiation, not replication. Competing with existing fast-payment systems is a losing battle.
- Open ecosystems matter. UPI’s success shows how public-private collaboration and open APIs drive innovation.
- Build legal trust. Clear rules on privacy and state oversight are non-negotiable.
- Pilot with purpose, scale with success. Start small with high-impact use cases, then expand.
As of today, 137 countries—representing 98% of global GDP—are exploring CBDCs (Atlantic Council CBDC Tracker, 2025). Of these, roughly three-quarters are countries in the Global South, highlighting how developing economies see CBDCs as a tool to expand inclusion and reduce dependence on cash. For many in the Global South, India’s experiment is not a warning but a blueprint: CBDCs can bridge inclusion gaps if designed with humility, trust, and a focus on technology for real impact. Ultimately, the story of CBDCs in the South is not just about money; it is about dignity, confidence, and building financial systems that people genuinely believe serve them rather than watch over them. The true measure of success is not simply the number of transactions recorded, but whether CBDCs can address fear, distrust, and the everyday needs of ordinary people.
To achieve this, a pentahelix approach is crucial: academia can research to adapt CBDC design to local needs and ensure user experience is accessible for rural communities; media can act as hubs for literacy and public awareness; fintech firms can innovate products and services on top of CBDC infrastructure; civil society can serve as watchdogs to safeguard privacy; and government can provide legitimacy and regulatory clarity. Together, these five stakeholders form the collaborative ecosystem needed for CBDCs to be trusted and effective in the Global South.
Global policy debates echo this need. The IMF’s REDI framework (Regulation, Education, Design, Incentives) emphasizes that CBDC adoption requires not only strong regulatory guardrails but also grassroots education, careful design tailored to local contexts, and well-structured incentives to sustain use. Chatham House, through its Inclusive Governance Initiative, emphasizes that legitimacy in digital finance hinges on incorporating civil society and non-state actors into the design process from the outset, thereby fostering trust and ownership. Likewise, the BIS 2023 survey on CBDCs found that more than half of central banks in emerging and developing economies are prioritizing offline access and interoperability as core features for retail CBDCs. These global perspectives align closely with the realities of the Global South, and without inclusive governance, local adaptation, and trust-building, CBDCs risk becoming technical projects with little to no real impact.
In collaboration with: Dr. Pinki Insan, Associate Professor with 23 years’ experience.