The Reserve Bank of India has laid out plans to take its digital rupee experiment beyond domestic borders, with cross-border CBDC pilots forming a central part of its agenda for the current financial year.

At the same time, fresh data from the central bank's annual report shows the Indian rupee is playing a growing role in settling trade with partner countries.

Cross-Border CBDC on the Horizon

The RBI has been in conversation with two key foreign central banks to launch bilateral pilots for using the digital rupee in international transactions. Talks with the Monetary Authority of Singapore and the Central Bank of the UAE are already underway, with both relationships formalised through official channels during 2025-26.

The central bank also signed a memorandum of understanding with Singapore's monetary authority on digital asset collaboration last fiscal year, laying the groundwork for eventual operational pilots.

Beyond bilateral ties, the RBI has joined multilateral initiatives led by the Bank for International Settlements Innovation Hub, which are focused on improving cross-border payment systems through the use of central bank digital currencies.

Domestic CBDC Expansion Planned

On the home front, the RBI intends to widen the reach of its digital rupee across more direct benefit transfer schemes run by both the central and state governments. The bank ran multiple CBDC pilots under DBT programmes in 2025-26, using the programmability feature of digital currencies to target specific use cases.

Plans for the current year also include extending the CBDC pilot into the domestic retail space and exploring the tokenisation of financial assets. A dedicated sandbox framework called the CBDC and Asset Tokenisation, or CAT, sandbox is also on the agenda to allow testing of innovative products and services built around the digital rupee.

Circulation Numbers Slip

Despite the expansion plans, the value of digital rupee notes in circulation actually fell between the end of the last two financial years. The CBDC-R, which represents bank notes in digital form, stood at Rs 771.66 crore as of March 31, 2026, down from Rs 1,016.46 crore a year earlier.

The decline suggests adoption challenges remain even as the bank pushes to broaden the scope and reach of the digital currency.

Rupee's Global Trade Role Grows

Separately, the RBI's annual report highlighted a steady rise in the use of the Indian rupee for trade invoicing and settlement. The central bank said the trend has been building since July 2022, when a framework for rupee-based trade settlement was put in place.

Between August 2022 and July 2025, imports invoiced in rupees grew at a compound annual rate of 20.9 percent, while exports invoiced in rupees grew at 12.7 percent over the same period.

Recent Data Shows Continued Momentum

The numbers for 2025-26 continue in the same direction. Export invoicing in rupees grew 6.5 percent year on year, while import invoicing grew 9.5 percent. Settlement figures showed even sharper movement, with import settlements in rupees rising 41.2 percent compared to the previous year.

In absolute terms, rupee invoicing for imports stood at Rs 2.85 lakh crore in 2025-26, up from Rs 2.60 lakh crore the year before. Export invoicing reached Rs 3.27 lakh crore, compared to Rs 3.07 lakh crore in 2024-25.