India, UAE to collaborate on cross-border central bank digital currencies

The central banks of India and the United Arab Emirates (UAE) will jointly run pilot programs on their central bank digital currencies (CBDCs), according to a Wednesday press release from the Reserve Bank of India (RBI). 

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Fast facts

• The Indian central bank and its UAE counterpart have signed a memorandum of understanding in Abu Dhabi to explore the “interoperability” between the two countries’ CBDCs. 
• In this case, interoperability refers to the ease of flow between CBDCs of one country to and from another. 
• The bank’s activities will include jointly conducting “proof-of-concept and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade,” the announcement said.
• India has been testing a retail CBDC in 15 cities since last November, with plans to expand trials. In December, the country also launched a wholesale CBDC pilot to test the settlement of secondary market transactions in government securities.  
• The UAE’s central bank last month announced its plans to launch its CBDC, among other blockchain-related initiatives, as part of efforts to become a financial and digital payment hub.
• According to a Monday report by U.K. technology market researcher Juniper Research, the global value of CBDCs is expected to grow from US$100 million today to US$213 billion by 2030, once virtual money gains greater adoption for domestic payments. 

See related article: UAE central bank to issue CBDC, promote digital asset growth

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