RBI, UAE central bank sign MoU on interoperability of their CBDCs

Mumbai, March 15, 2023 

Move is expected to reduce costs, boost efficiency of cross-border dealings and strengthen economic ties between India and UAE

The central banks of India and the United Arab Emirates have signed a memorandum of understanding (MoU) to explore interoperability between their respective central bank digital currencies, among other things.

In a statement on Wednesday, Reserve Bank of India (RBI) said, “RBI and the Central Bank of the United Arab Emirates (CBUAE) signed a MoU in Abu Dhabi to enhance cooperation and jointly enable innovation in financial products and services”.

Under the MoU, the two central banks – RBI & CBUAE – will collaborate on various emerging areas of FinTech, especially Central Bank Digital Currencies (CBDCs) and explore interoperability between the CBDCs of CBUAE and RBI.

Further, CBUAE and RBI will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade.

This bilateral engagement of testing cross-border use cases of CBDCs is expected to reduce costs, increase efficiency of cross border transactions and further the economic ties between India and UAE. The MoU also provides for technical collaboration and knowledge sharing on matters related to Fintech and financial products and services, the central bank said in its statement.

[The Business Standard]