CENTRAL BANK DIGITAL CURRENCIES & CROSS-BORDER PAYMENTS:INDIA’S DIGITAL RUPEE EXPERIMENT IN A FRAGMENTED GLOBAL FINANCIAL ORDER

The proliferation of private digital currencies and stablecoin has compelled central banks worldwide to reassert monetary sovereignty through Central Bank Digital Currency (CBDC) initiatives. This paper examines India’s Digital Rupee (e₹) within the broader context of global CBDC developments and cross-border payment infrastructure. Through doctrinal analysis and comparative methodology, we investigate India’s hybrid CBDC architecture, its legal foundations under the RBI Act (1934) and related statutes and its positioning within emerging multilateral frameworks like mBridge. India has processed over 2.73 crore retail CBDC transactions, demonstrating early adoption momentum. However, significant challenges persist like reconciling technological innovation with monetary sovereignty, ensuring cross-border legal certainty, and balancing financial surveillance with privacy rights. We analyse these tensions through comparative study of China’s e-CNY, the Digital Euro, and BIS interoperability frameworks. Our findings suggest that India’s tiered anonymity model and integration with digital public infrastructure (“DPI”) offer a cautiously inclusive approach. Yet, without harmonized international legal standards, cross-border CBDC adoption risks deepening financial fragmentation rather than resolving it. The paper concludes with policy recommendations for statutory reform, data governance, and India’s potential leadership in shaping Global South CBDC cooperation networks.

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