- The Reserve Bank of India and the Central Bank of the UAE signed a Memorandum of Understanding to enhance cooperation in financial services innovation.
- The MoU aims to connect India and the UAE at different stages of FinTech.
- Under the memorandum, countries will analyze the interoperability of their CBD.
The Reserve Bank of India (RBI) has teamed up with the Central Bank of the United Arab Emirates (CBUAE), to sign an agreement to “enhance cooperation and jointly enable innovation in financial products and services.”
On March 15, the Reserve Bank of India (RBI) announced that the regulator had signed a Memorandum of Understanding with the UAE Central Bank in Abu Dhabi with the mutual understanding to show joint cooperation in multiple areas of FinTech.
Mutually, the MoU will provide “technical cooperation and knowledge sharing” on various topics in the field of financial technology and financial products and services.
Following the RBI announcement, India’s national public radio broadcaster, All India Radio, shared a Twitter thread announcing the agreement between India and the UAE:
Reserve Bank of India and Central Bank of UAE sign Memorandum of Understanding to promote innovation in financial products and services. https://t.co/jOGH7QdPz5
– All India Radio News (@airnewsalerts) March 16, 2023
Significantly, as per the announcement made by the Reserve Bank of India, the MOU aims to forge a reciprocal relationship between the central banks of India and the UAE in various cutting-edge areas of FinTech, including interoperability analysis of central bank digital currencies (CBDCs). Both India and the United Arab Emirates.
Additionally, the Reserve Bank of India (RBI) confirmed that the banks will collaborate in conducting a proof-of-concept (PoC) and launching a binary bridge for central bank digital currency, citing:
UAE Bank and Reserve Bank of India (RBI) will jointly conduct proof of concept (PoC) and pilot(s) of bilateral bridge between CBDCs to facilitate cross-border transactions of remittances and trade via CBDCs.
Notably, as emphasized by the RBI, the bilateral engagement of CBDCs between the two countries is clearly focused on reducing costs, increasing the efficiency of cross-border transactions, and developing economic relations between India and the UAE.
It is noteworthy that India has offered retail CBDCs in several cities, through which the country has succeeded in reaching more than 50,000 customers and 10 merchants. The country also plans to launch a digital currency by the end of 2023.
It is assumed that the cooperation between India and the UAE will benefit the positions of the two countries in the field of cryptocurrencies and contribute to their further development.
RBI and CBUAE’s subsequent Memorandum of Understanding appeared: FinTech Enhancement Focuses First on Coin Issuance.