In a groundbreaking move, the Reserve Bank of India (RBI) has embarked on discussions with the central banks of 18 nations to explore the potential of cross-border transactions using the digital rupee.
The RBI’s ambitious plans for its central bank digital currency (CBDC) have garnered significant attention, as reported by the Economic Times on June 27. RBI Governor Shaktikanta Das, in his recent address in London, underscored the significance of establishing a robust foreign trade infrastructure for the digital rupee, which is poised to surpass one million domestic users by the beginning of July.
Since July 2022, an impressive array of banks from 18 countries has already initiated the process of opening rupee vostro accounts, as revealed by Das in a public statement.
The governor further elaborated on India’s eagerness to offer its CBDC as a payment method for importing Indian goods to nations grappling with a shortage of U.S. dollars.
Having launched its wholesale digital rupee pilot project in November 2022, followed by a retail digital rupee pilot project in February 2023, the RBI has been steadily advancing its digital currency initiatives.
Furthermore, in a remarkable development, the RBI recently announced a collaborative endeavor with the Central Bank of the United Arab Emirates to explore the establishment of a CBDC bridge for trade and remittances.
The RBI’s efforts to propel the digital rupee onto the global stage have garnered international attention, fostering increased collaboration and paving the way for a new era in cross-border transactions.