by • India’s Central Bank, the Reserve Bank of India (RBI), signed a Memorandum of Understanding (MoU) with the Central Bank of UAE (CBUAE).
• This collaboration focuses on enhancing cooperation and jointly enabling innovation in financial products and services.
• The two banks are set to jointly investigate the interoperability of their CBDCs, allowing for cross-border transactions of remittances and trade.
India and UAE to Test CBDC Interoperability
The Reserve Bank of India (RBI) has announced that it is partnering with the Central Bank of UAE (CBUAE). Through this Memorandum of Understanding (MoU), both countries will collaborate on various emerging areas in FinTech, particularly Central Bank Digital Currencies (CBDCs).
50,000 Users and 5,000 Merchants Now Using Digital Currency
The MoU was signed on Wednesday in Abu Dhabi. As part of this initiative, 50,000 users and 5000 merchants have now begun using digital currency. This will enable more efficient cross-border transactions while reducing costs between India and UAE.
Proof Of Concepts And Pilots Of Bilateral CBDC
Both central banks will conduct Proof Of Concepts as well as pilots for bilateral CBDC. These measures are expected to further economic ties between both countries by facilitating cross-border transactions such as remittances or trade via CBDCs.
Digital Rupee Pilot In 15 Cities
RBI launched its pilot program for digital rupee last year in November for wholesale sectors and December for retail sectors. This enabled 15 cities across India to begin using digital currency through its 50,000 users and 5,000 merchants. The bank asserted that they view this CBDC as an alternative to cryptocurrency.
Interoperability Of Their CBDCs To Be Investigated Jointly
The Indian bank highlighted the purpose behind this technical collaboration with the UAE through its MoU: joint investigation into the interoperability between their respective CBDCs. Through this measure, both countries’ central banks hope to increase efficiency in cross-border activities even further than previously possible.
