HDFC Bank on Friday said it has implemented interoperability between the central bank digital currency (CBDC) and unified payment interface (UPI) — the first domestic lender to introduce the feature.

The Reserve Bank of India (RBI) had launched pilots for the retail digital rupee which can be held or used for transactions in December.

This was done in various locations comprising participating customers and merchants in a closed user group (CUG).

HDFC Bank is among the lenders who are part of the project. CBDC or Digital Rupee is a tokenised digital version of the Indian rupee, issued by the RBI.

Under the new feature, HDFC Bank customers with UPI ID can use the QR code at shops to transfer money from their CBDC wallets. Both the customers and shop owners must be part of the bank’s closed user group.

The country’s largest private sector lender said it has on-boarded over 1 lakh customers and more than 1.7 lakh merchants in the CBDC pilot programme.