India Fosters Global Cross-Border Payments For The Digital Rupee
The Reserve Bank of India (RBI) is on course to expand the frontiers of its Central Bank Digital Currency (CBDC), the “digital rupee” as it negotiates with foreign countries to adopt cross-border payment systems.
The bank is currently in talks with its counterpart in at least 18 countries on ways to facilitate trade between countries that lack US dollar reserves.
According to a report by the Economic Times on June 27, the country is conducting studies and experimenting in many areas outside its domestic payments purview.
The RBI Governor Shaktikanta Das was quoted to have stressed the importance of accelerating foreign infrastructure to accommodate the growing demand for the digital rupee.
“Cross-border payments will also become much quicker, more seamless, and very cost-effective. That is another area where a lot of attention needs to be given. We are constantly in dialogue with other central banks that have introduced or are introducing CBDCs.”
This comes months after the RBI and United Arab Emirates Central Bank revealed plans to collaborate on cross-border payment. Both countries signed a memorandum of understanding (MoU) that would trigger joint research into CBDC-related pilots and proofs-of-concept.
Per the MoU, both institutions aim to “reduce costs, increase the efficiency of cross-border transactions, and further economic ties between India and the UAE.”
Stressing on the need to drive India’s exports through the digital rupee, Das noted that it is a pathway for countries with limited dollar flow.
“In India, we have no shortage of dollars, but in some other markets, due to a shortage of dollars, they are unable to do imports.”
Since the launch of India's CBDC in Nov 2022 and Feb 2023, its wholesale and retail
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