UAE and India to collaborate to bring digital currencies

The Reserve Bank of India (RBI) and the Central Bank of UAE (CBUAE) have entered into a Memorandum of Understanding, the RBI said in a statement on March 15.

Through this MoU, the two entities will work on different emerging areas in fintech, with a specific focus on Central Bank Digital Currencies (CBDC), the RBI said, adding that it will also look at interoperability between the digital currencies of both entities.

The RBI and the CBUAE will jointly work on a proof of concept and different pilots of a bilateral bridge to facilitate cross-border CBDC transactions of remittances and trade.

"This bilateral engagement of testing cross-border use case of CBDCs is expected to reduce costs, increase the 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 statement by RBI read.

India has already begun testing a retail CBDC in over 15 cities that touch over 50,000 customers and over 10,000 merchants, Coindesk reported.