PayPal-backed ecommerce firm Mintoak acquires Indian CBDC startup for $3.5m

PayPal and HDFC Bank-backed Mintoak has acquired Digiledge in a $3.5 million deal, marking the first acquisition in India’s central bank digital currency space.

Mintoak, an Indian ecommerce startup that facilitates merchant payments, has acquired Digiledge in a deal worth around $3.5 million, marking the first acquisition in India’s CBDC area, Reuters, has learned, citing sources close to the matter.

With Digiledge, which specializes in CBDC and bill payments, Mintoak’s partner banks — HDFC Bank, Axis Bank, and SBI — could offer payment solutions in e-rupee, India’s form of CBDC. With the acquisition, Mintoak CEO Raman Khanduja says the firm wants to make it “easier for merchant acquirers to grow and help more small and medium enterprises access digital tools and financial services.”

India’s central bank, the Reserve Bank of India, launched its e-rupee pilot in December 2022. Initially, only banks could use it, but the scope expanded to payment firms in April 2023.

The e-rupee adoption has been sluggish, with the RBI reporting 1 million retail transactions by late June 2024, a milestone reached only after local banks introduced incentives and partially paid employee salaries using the state-issued digital currency.

The RBI had previously urged banks to increase transactions to at least 1 million per day by late 2023 to test the system’s scalability. However, this push has since ceased, casting doubt on the future of the digital currency initiative due to the gap between incentivized metrics and actual user adoption.