Indian startup Mintoak, which provides merchant payment services to lenders, said on Tuesday it has bought Digiledge, marking the first acquisition in the nascent central bank digital currency space in a deal that sources said was worth around $3.5 million.

The Reserve Bank of India started a pilot for the CBDC, or e-rupee, a digital alternative to physical currency, in December 2022, and last April, it expanded the scope of transactions to payment firms from having limited it to just banks initially.

PayPal and HDFC Bank backed Mintoak has completed the acquisition of Digiledge, which specialises in CBDC and bill payments services, said two sources aware of the matter, declining to be identified as they are not authorised to speak with the media.

The deal will enable Mintoak’s partner banks, which include HDFC Bank, Axis Bank and SBI, to offer more comprehensive CBDC-related payment solutions to their clients, Mumbai-based Mintoak said.

“By adding Digiledge’s bill payments and CBDC capabilities, we are making it easier for merchant acquirers to grow and help more small and medium enterprises access digital tools and financial services,” Mintoak CEO Raman Khanduja said.

In January, Cred and MobiKwik became the first fintech platforms to give customers access to the CBDC.

Alphabet’s Google Pay, Walmart-backed PhonePe and Amazon Pay are among the payment firms seeking to join the pilot, Reuters reported in August 2024.