The Reserve Bank of India (RBI) is engaged in discussions with central banks from 18 other countries to explore the possibility of cross-border payments using its central bank digital currency (CBDC) called the “digital rupee.” The RBI Governor, Shaktikanta Das, has emphasized the importance of foreign trade infrastructure for the digital rupee, which is expected to reach 1 million users domestically by July.
Several banks from these 18 countries have already opened rupee vostro accounts since July 2022. The RBI is eager to offer its CBDC as a payment method for importing Indian goods for countries facing a shortage of US dollars. By using the digital rupee, these countries can facilitate quicker, more seamless, and cost-effective cross-border transactions.
Additionally, India aims to save its US dollar reserves and avoid external sector crises that occurred during the “taper tantrum” period.
The RBI has been actively working on its digital rupee project, launching wholesale and retail digital rupee pilot projects in November 2022 and February 2023, respectively.
In March, the RBI also announced an agreement with the Central Bank of the United Arab Emirates to study a CBDC bridge for trade and remittances. The efforts to integrate the digital rupee into cross-border payments highlight India’s ambition to leverage its CBDC in the global trade landscape.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up