India’s central bank, the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (UAE) have agreed to cooperate on cross-border central bank digital currency (CBDC) transactions for remittances and trade. India’s central bank explained, “This initiative is expected to reduce costs, increase the efficiency of cross-border transactions, and advance economic ties between India and the UAE.”
India and UAE collaborate on CBDC
India’s central bank, the Reserve Bank of India (RBI), on Wednesday announced a collaboration with the Central Bank of the United Arab Emirates to enhance the central bank digital currency (CBDC) efforts of both countries.
The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) today signed a Memorandum of Understanding (MoU) in Abu Dhabi to enhance cooperation and jointly enable innovation in financial products and services. described.
“Under the MoU, the two central banks will collaborate on various emerging areas of fintech, particularly central bank digital currencies (CBDCs) and explore interoperability between CBUAE and RBI’s CBDC,” the central bank of India continued in detail. :
CBUAE and RBI will jointly conduct a proof-of-concept (PoC) and pilot of a bilateral CBDC bridge to facilitate cross-border CBDC transactions for remittance and trade.
India launched its digital rupee pilot in November last year for the wholesale sector and in December for the retail sector. Earlier this month, RBI Executive Director Ajay Kumar Choudhary had said that the country’s CBDC would serve as an alternative to cryptocurrencies.
Noting that “the MoU also provides for technical cooperation and knowledge sharing on matters related to fintech and financial products and services,” the RBI concluded:
This bilateral engagement to test the cross-border use of CBDCs is expected to reduce costs, increase the efficiency of cross-border transactions, and advance economic ties between India and the UAE.
In February, the RBI revealed that 50,000 users and 5,000 merchants are using the digital rupee.
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