The central bank of India, the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (UAE) have agreed to collaborate on cross-border remittance transactions and trade in central bank digital currency (CBDC). The initiative is expected to “reduce costs, increase the efficiency of cross-border transactions and foster economic ties between India and the UAE,” India’s central bank explained.
India and the United Arab Emirates collaborate on CBDCs
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) signed a Memorandum of Understanding (MoU) today in Abu Dhabi, to enhance cooperation and jointly enable innovation in products and services. financial,” the RBI said. described.
“Under the MoU, the two central banks will collaborate on various emerging fintech areas, especially central bank digital currencies (CBDCs) and will explore interoperability between CBUAE and RBI CBDCs,” the central bank of India continued, explaining:
CBUAE and RBI will jointly conduct a proof of concept (PoC) and pilot(s) of the bilateral CBDC bridge to facilitate cross-border CBDC trade and remittance transactions.
India started its digital rupee pilot in November last year for the wholesale sector and in December for the retail sector. RBI CEO Ajay Kumar Choudhary said earlier this month that the country’s CBDC will act as an alternative to cryptocurrency.
Noting that “the MoU also provides for technical collaboration and knowledge sharing on matters related to fintech and financial products and services,” the RBI concluded:
This bilateral commitment to test the cross-border use case for CBDCs is expected to reduce costs, increase the efficiency of cross-border transactions and foster economic ties between India and the United Arab Emirates.
In February, the RBI revealed that 50,000 users and 5,000 merchants are using digital rupees.
What do you think about the collaboration of the central bank of India and the Central Bank of the United Arab Emirates in CBDC work? Let us know in the comments section.
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