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The Reserve Bank of India (RBI) announced an expansion in the functionality of the Unified Payments Interface (UPI) as part of its policy review on Wednesday. Users of this platform for instant bank transfers online will be able to set it up for recurring payments, with linked bank accounts blocking funds for such debits. Those who make routine payments will find this useful. It should also acquaint UPI users with the idea of directing money to act as told. This could set the stage for programmable or “smart" money, which RBI’s e-rupee might one day serve as. Smart money does not involve any instructions for banks but instead has software behind a central bank digital currency (CBDC) moving as directed by its user. On paper (in its metaphorical sense), digital cash can go beyond basic tasks like routine transfers. It could be programmed to first look up a data record to check whether a specified condition, like an online order, has been fulfilled before moving into a payee’s hands. Such an e-rupee seems far off, though. For now, RBI should work out exactly how anonymous its retail CBDC will be. Up to what transaction size will it erase e-rupee usage trails? And after how long?

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