The rapid digital transformation of the financial sector has led the Reserve Bank of India (RBI) to develop Central Bank Digital Currencies (CBDCs) as an efficient alternative fiat currency. It represents a remarkable step towards modernising the payment infrastructure, but its successful adoption will depend on consumer perception and trust in the digital rupee. The present study examines the impact of financial literacy, privacy concerns, and fraud risk perception on consumer trust and their consequent impact on the adoption intention of CBDCs in Gujarat. Primary data was collected from 278 respondents from Gujarat through a structured questionnaire using a five-point Likert scale and analysed using Confirmatory Factor Analysis and Structural Equation Modelling (SEM). The findings of the study revealed that financial literacy has a significant positive impact on consumer trust, whereas privacy concerns and fraud risk perception have a significant negative impact on consumer trust. Moreover, consumer trust was found to have a significantly strong positive impact on the adoption intention of the digital rupee. The study provides practical implications for policymakers and financial service providers by explaining the pivotal role of consumer trust, which can be enhanced through increasing financial literacy, strengthening privacy protection, and reducing perceived fraud risks, thereby contributing to the adoption of the digital rupee in Gujarat.