The Reserve Bank of India (RBI) and the Central Bank of UAE (CBUAE) have announced a partnership to enhance their Central Bank Digital Currency (CBDC) transactions of remittances and trade.
The collaboration aims to increase the efficiency of cross-border transactions and reduce costs. The two central banks signed a Memorandum of Understanding (MoU) on Wednesday in Abu Dhabi to enhance cooperation and jointly enable innovation in financial products and services.
Under the MoU, the RBI and CBUAE will collaborate on various emerging areas of FinTech, particularly CBDCs, and explore interoperability between the CBDCs of the two central banks. This initiative is expected to further economic ties between India and UAE and bring more transparency to cross-border transactions.
The banks will also conduct Proof of Concepts and pilots of bilateral CBDC to facilitate cross-border CBDC transactions of remittances and trade. The initiative is in line with the RBI’s efforts to explore the possibility of launching a digital version of the Indian Rupee.
This move is significant for both countries as India is the UAE’s second-largest trading partner, and the UAE is India’s third-largest trading partner. The two countries have a long-standing economic relationship, and this partnership is expected to enhance it further.
Speaking about the partnership, the Governor of RBI, Shaktikanta Das, said, “This agreement marks a significant milestone in the cooperation between the Reserve Bank of India and the Central Bank of the UAE, and will further strengthen the longstanding relationship between the two countries.”
The partnership between the RBI and CBUAE is expected to pave the way for similar collaborations between other central banks globally. The adoption of CBDCs is gaining momentum worldwide, with several countries exploring the possibility of launching their digital currencies.
In conclusion, the partnership between the RBI and CBUAE is expected to bring more transparency and efficiency to cross-border transactions and further strengthen the economic ties between India and UAE. The collaboration is a significant milestone in the adoption of CBDCs globally and is expected to pave the way for similar collaborations between other central banks worldwide.
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