Abu Dhabi, UAE

Indian central bank, the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) on Thursday signed a Memorandum of Understanding (MoU) that aims to enhance cooperation and jointly enable innovation in financial products and services. Under this, the India and UAE central banks will jointly conduct pilot programmes on central bank digital currencies or CBDCs.

Advertisment

Watch | India takes step towards Global Rupee Trade, signs Digital Currency deal with UAE

As per the press release published on the RBI website, "the two central banks will collaborate on various emerging areas of FinTech, especially Central Bank Digital Currencies (CBDCs) and explore interoperability between the CBDCs of CBUAE and RBI."

Advertisment

CBUAE and RBI will jointly conduct proof-of-concept (PoC) and the pilot projects of the digital currencies "to facilitate crossborder CBDC transactions of remittances and trade."

Also read | RBI allows India and Tanzania to use national currencies for trading

As per the statement, this "bilateral CBDC bridge" is expected to aid in the reduction of costs. Further, it will help "increase the efficiency of cross-border transactions and further the economic ties between India and UAE."

Advertisment

It also provides for technical collaboration and knowledge sharing "on matters related to Fintech and financial products and services" between UAE and India.

(With inputs from agencies)

WATCH WION LIVE HERE

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.