The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (UAE) announced on March 15 that they have signed a memorandum of understanding on cooperation and innovation in financial services.
The parties will specifically focus on central bank digital currency (CBDC) interoperability and develop a concept and pilot project for a CBDC bridge to facilitate remittances and trade. They said such a bridge would reduce costs and increase the efficiency of transactions, and strengthen economic ties.
Indian and Emirati bank officials kept Correspondent talks about the Rupee-Dirham payment system using banks in February. The system has been in development for a year. Countries currently use US dollars for payments.
Although remittances from the Gulf region declined by 50% compared to 2016-2017, the UAE remains a major source of remittances to India, accounting for 17-18% of the total US$ 87 billion in July 2022. The UAE was a major source for India until the outbreak of Covid migrated to America.
India and the UAE will explore a retail CBDC to handle remittances. India currently has a domestic digital rupee pilot program with 50,000 users and 5,000 merchants participating. The RBI said in late February that it had completed 800,000 transactions worth $134 million through its total CBDCs and was testing the offline functionality of its CBDC.
India and the UAE will explore a retail CBDC to handle remittances. India currently has a digital rupee pilot project 50,000 users and 5,000 businesses participate. The Reserve Bank of India also reported in late February It had completed around 800,000 transactions With its total CBDCs valued at $134 million, it is also testing the offline functionality of its CBDCs.
India dIt has also recently integrated its integrated payment interface without blockchain With the Singapore PayNow system.
The UAE launched a nine-part financial transformation plan announced its intention to launch a CBDC February for domestic and cross-border use. Earlier, there were Emirati banks Participated in the mBridge pilot project, along with banks in Hong Kong, China and Thailand, for cross-border transfers using CBDC. In addition, the UAE expects the UAE cryptocurrency to “play an important role in the UAE’s trade in the future,” UAE Foreign Trade Minister Thani Al-Siodi said in January. In World Economic Forum.
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