India and UAE have agreed to collaborate on cross-border CBDC transactions of remittances and trade
The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates will work together to advance both nations’ central bank digital currency (CBDC) initiatives, the two central banks announced on Wednesday.
“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 financial products and services,” the RBI described.
India’s central bank said, “Under the Agreement, the two central banks will cooperate on many new fintech areas, particularly central bank digital currencies (CBDCs), and study interoperability between the CBDCs of CBUAE and RBI.”
In November of last year, for the wholesale sector, and in December, for the retail sector, India launched its digital rupee trial. Ajay Kumar Choudhary, the executive director of the RBI, stated earlier this month that the country’s CBDC will serve as a substitute for cryptocurrencies.
The RBI came at the following conclusion after pointing out that: “The Agreement also provides for technological collaboration and knowledge sharing on topics pertaining to fintech and financial products and services”. It is anticipated that this bilateral testing of CBDC cross-border use cases will lower costs, improve the effectiveness of cross-border transactions, and strengthen economic connections between India and the UAE.
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