India and UAE Collaborate to Boost Cross-Border Central Bank Digital Currency Transactions – On Wednesday, the Reserve Bank of India (RBI), the country’s central bank, revealed its partnership with the Central Bank of the United Arab Emirates to strengthen the development of their respective central bank digital currencies (CBDCs).
“The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) signed a Memorandum of Understanding (MoU) in Abu Dhabi, to enhance cooperation and jointly enable innovation in financial products and services,” the RBI described.
“Under the MoU, the two central banks will collaborate on various emerging areas of fintech, especially central bank digital currencies (CBDCs) and explore interoperability between the CBDCs of CBUAE and RBI,” India’s central bank stated. Elaborating: “CBUAE and RBI will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade.”
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In November of last year, India commenced its pilot of the digital rupee for the wholesale sector, followed by the retail sector in December. Ajay Kumar Choudhary, an Executive Director at the RBI, stated earlier this month that the country’s CBDC would function as a substitute for cryptocurrency.
Noting that “The MoU also provides for technical collaboration and knowledge sharing on matters related to fintech and financial products and services.” The Reserve Bank of India (RBI) has declared that the collaborative testing of cross-border usage scenarios of central bank digital currencies (CBDCs) with the Central Bank of the United Arab Emirates is anticipated to enhance the efficiency and cost-effectiveness of cross-border transactions.
Furthermore, this endeavor is expected to bolster economic ties between the two countries. The Reserve Bank of India (RBI) made an announcement in February regarding the digital rupee’s progress, indicating a surge in its popularity with both individuals and businesses. According to the announcement, the digital rupee has garnered over 50,000 users and 5,000 merchants, indicating a growing interest in the use of the CBDC.
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