The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates announced cooperation to enhance central bank digital currency (CDC) efforts of both countries.
The two nations will concentrate on central bank digital currency interoperability and develop a proof-of-concept and pilot programme for a CDC bridge in order to enhance trade and remittances. It is planned to strengthen economic ties, cut spending, and boost transactional effectiveness.
Banking officials from India and the UAE are debating the use of correspondent banks in the Rupee-Dirham payment system. For a year, that system has been in development. countries that now settle payments made in US dollars.
Cross-border functionalities drive CBDCs.
The necessity to enhance cross-border payments is one of the main drivers among interested organisations as central banks around the world continue to push for CBDCs. To lessen their dependency on Western payment systems, Russia and China have expressed an interest in investigating international payments through CBDCs.
The International Monetary Fund (IMF) highlighted the advantages of CBDCs in a recent report, noting that they may increase financial inclusion, but also issued a warning about the dangers they posed to commercial banks.
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