Two major financial institutions in central Asia and the middle east, the Reserve Bank of India and the Central Bank of the UAE, signed a Memorandum of Understanding (MoU) to promote financial innovations like digital currencies.
The MoU signed In Abu Dhabi will collaborate between two powerful nations in the wake of global power shifting from Western countries to Asia and the Middle east.
The collaboration will embrace Financial Technology (FinTech), “especially Central Bank Digital Currencies (CBDCs).” Per the MOU, both financial institutions will strive for interoperability between the CBDCs (central bank digital currencies) of CBUAE and RBI.
In addition to this, RBI and CBUAE will establish proof-of-concept (PoC) and pilot(s) of a bilateral CBDC bridge to enable cross-border CBDC transactions for remittances and trade.
RBI stated in a press release, “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.”
As the world is becoming bipolar to multipolar, a myriad of financial collaborations are taking place to counter the dominance of the USD and EUR.