Mumbai, Sept. 16 -- The introduction of merchant discount rate (MDR) charges on person-to-merchant (P2M) transactions on the unified payments interface (UPI) could help the government and the Reserve Bank of India (RBI) push retail use cases for the central bank digital currency (CBDC), especially for key subsidy transfers. Higher adoption of the digital currency is also seen easing some burden off the over-strained UPI.

There is an expectation that the introduction of MDR could give a push to retail CBDC adoption, as some users and merchants may move towards the digital rupee to avoid such charges, which could have a positive impact on its adoption, three people aware of the development told Mint.

It is also expected that the governmen...