The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (UAE) have agreed to work together on CBDC transactions involving cross-border remittances and trade. The Reserve Bank of India (RBI) has outlined that this initiative is anticipated to lower expenditure, boost the efficiency of transnational dealings, and reinforce the economic relationship between India and UAE.
All About the CBDCs Collaboration: India and UAE
On Wednesday, the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) announced a collaboration to foster the growth of their respective Central Bank Digital Currencies (CBDCs). The RBI and the CBUAE have recently entered into the Memorandum of Understanding (MoU), which was signed in Abu Dhabi, for facilitating the advancement of various financial products and fostering better collaboration.
Under the Memorandum of Understanding (MoU), the CBUAE and the RBI will collaborate on emerging areas of fintech, in particular Central Bank Digital Currencies (CBDCs). They will also try exploring the interoperability among those CBDCs of both banks. In November last year, India commenced a pilot program for its digital rupee, beginning with the wholesale sector and extending to the retail sector by December. In February, it was reported that around fifty thousand users and five thousand merchants had adopted digital rupees.
Recently, the Reserve Bank of India’s Executive Director Ajay Kumar Choudhary stated that the country’s central bank digital currency (CBDC) would serve as an alternative to cryptocurrency. The Reserve Bank of India (RBI) concluded that the Memorandum of Understanding (MoU) facilitates technical collaboration and the exchange of knowledge pertaining to fintech and various financial products and services.