Digital Rupee Adoption: Blockchain’s Role in India’s Central Bank Digital Currency

Abstract

India's Central Bank Digital Currency (CBDC), the digital rupee (e₹), was introduced to support the transformation of the country's digital payment and financial ecosystem; however, its adoption remains relatively limited. This study examines the factors influencing technology valuation and adoption intention toward e₹ in India. Specifically, the study investigates the effects of competition from other payment options, digital illiteracy, financial inclusion, economic growth, payment diversity, scalability, and secure and centralized systems on technology valuation, and further examines the effect of technology valuation on adoption intention. Data were collected from 252 respondents using a fully structured questionnaire, representing a 63% response rate. The proposed model was empirically assessed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that competition from other payment options, digital illiteracy, financial inclusion, economic growth, payment diversity, and secure and centralized systems have statistically significant positive effects on technology valuation. In contrast, scalability has a positive but statistically non-significant relationship with technology valuation. Technology valuation has a strong and statistically significant positive effect on adoption intention (β = 0.794, p < 0.001). The structural model explains 89.1% of the variance in technology valuation and 63.1% of the variance in adoption intention. Overall, the findings demonstrate that the adoption of e₹ is influenced by a combination of economic, financial, competitive, payment-related, and technological considerations. The study contributes to the emerging literature on CBDC adoption by highlighting the importance of technology valuation as a key mechanism through which characteristics of the digital-currency ecosystem influence users' intention to adopt e₹.