India, UAE to explore CBDC bridge to facilitate trade, remittances without USD
The Reserve Bank of India (RBI) and Central Bank of the United Arab Emirates (UAE) announced on March 15 that they had signed a memorandum of understanding on collaboration and innovation in financial services.The parties will particularly concentrate on central bank digital currency (CBDC) interoperability and will develop a proof-of-concept and pilot program for a CBDC bridge to facilitate remittances and trade.
Such a bridge would reduce costs and increase efficiency of transactions, they noted, and strengthen economic ties.Indian and UAE banking officials held talks in February on a rupee-dirham payment system using correspondent banks.
That system has been under development for a year. The countries currently U.S. dollars to settle payments.Walking the talk ! @RBI and UAE Central Bank signed a MoU for innovation in financial products.
Development and interoperability in the field of Central Bank Digital Currencies (CBDCs) closer than ever. @DasShaktikanta @MEAIndia @Economyae @FinMinIndia @nsitharaman #FilePic pic.twitter.com/GDHC8Z9HdMAlthough remittances from the Gulf region are down 50% from 2016-2017, the UAE remains a major source of remittances to India, accounting for 17-18% of the total of around $87 billion, as of July 2022.
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