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RBI, Central Bank of UAE sign MoU to promote innovation in financial products
March 16, 2023
The Reserve Bank of India (RBI) on March 15 said that it has signed a Memorandum of Understanding (MoU) with the Central Bank of United Arab Emirates for promoting innovation in financial product and services.
Both central banks will collaborate on various emerging areas of FinTech, especially Central Bank Digital Currencies (CBDCs), and explore interoperability between the CBDCs of UAE’s central bank and the RBI.
“Central Bank of the United Arab Emirates (CBUAE) and RBI will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade,” RBI said in a release.
The central bank said that bilateral engagement of testing cross-border use case of CBDCs is expected to reduce costs and increase efficiency of cross border transactions.
“The MoU also provides for technical collaboration and knowledge sharing on matters related to Fintech and financial products and services,” release said.
Last year, the RBI had launched the pilot testing of the central bank’s digital currency in wholesale as well as retail segment.
In the retail pilot of CBDCs, the central bank said it will cover four cities- Mumbai, New Delhi, Bengaluru, and Bhubaneswar. The pilot will be subsequently extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
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