The Central Bank of the UAE (CBUAE) and the Reserve Bank of India (RBI) signed a Memorandum of Understanding (MoU) in Abu Dhabi to strengthen cooperation and enable joint innovation in financial products and services.
The two central banks will collaborate on various emerging areas of FinTech, particularly Central Bank Digital Currencies (CBDCs), and will investigate interoperability between CBUAE and RBI CBDCs.
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CBUAE and RBI will also collaborate to conduct a proof-of-concept (PoC) and pilot(s) of a bilateral CBDC bridge to facilitate cross-border CBDC remittances and trade transactions.
The MoU further includes technical collaboration and knowledge sharing on Fintech and financial products and services topics such as emerging trends, regulations, and policies.
Additionally, the agreement is expected to encourage joint CBDC experimentation and facilitate other digital innovation initiatives between the CBUAE and the RBI. This bilateral engagement of testing cross-border use cases of CBDCs is expected to reduce costs, increase the efficiency of cross-border transactions, and further the economic ties between India and UAE.
In October last year, CBUAE completed the first and the largest scale pilot of central bank digital currencies, being used by 20 commercial banks for real-value transactions on behalf of their corporate clients across borders, as part of “Project mBridge”, WAM reported.
“Project mBridge” – the first pilot use of wholesale CBDCs in the MENA region – reflects the UAE central bank’s drive to create quality financial infrastructure and innovative payment systems, which is in line with UAE leadership’s directives to support the UAE’s economic competitiveness and empower the diversity and growth of the nation’s financial sector.
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