India negotiates cross-border CBDC payments with global central banks
The Reserve Bank of India (RBI) is currently in dialogue with its counterparts from at least 18 other countries on the possibility of cross-border payments in the “digital rupee”.
The report about RBI’s ambitious foreign trade plans for the Indian central bank digital currency (CBDC), appeared in the Economic Times on June 27. It cites several public announcements by the RBI Governor, Shaktikanta Das.
During his June speech in London, Das emphasized the importance of foreign trade infrastructure for the “digital rupee”, which was set to reach 1 million users domestically by the beginning of July:
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According to the report, banks from 18 countries have already opened rupee vostro accounts since July 2022. In his other public appearance, Das explained India’s eagerness to provide its CBDC as a payment method for importing Indian goods for countries, struggling with the U.S. dollar supply:
Another reason for betting hard on the digital rupee for foreign trade deals is the intent to save up the dollar reserves of the country:
The RBI launched its wholesale digital rupee pilot project in Nov. 2022 and a retail digital rupee pilot project in Feb. 2023. In March it announced an agreement with the Central Bank of the United Arab Emirates to study a CBDC bridge for trade and remittances.
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