RBI’s Plans for Cross-Border Payments in Digital Rupee
The Reserve Bank of India (RBI) is in discussions with its counterparts from 18 countries to enable cross-border payments with the “digital rupee”, a crypto currency.
The report about RBI’s plans for the Indian central bank digital currency (CBDC) was published in the Economic Times on June 27. RBI Governor, Shaktikanta Das, made several public announcements about the same.
In his June speech in London, Das highlighted the need for foreign trade infrastructure for the “digital rupee”, which was expected to have 1 million users domestically by the beginning of July. Banks from 18 countries have reportedly opened rupee vostro accounts since July 2022.
Das further explained India’s intention to use its CBDC as a payment method for importing Indian goods to countries, which are facing a shortage of U.S. dollar supply.
Another justification for investing heavily in the digital rupee for foreign trade agreements is the aim to conserve the dollar reserves of the country:
The Reserve Bank of India (RBI) launched its wholesale digital rupee pilot project in November 2022 and a retail digital rupee pilot project in February 2023. In March, it declared an agreement with the Central Bank of the United Arab Emirates to investigate a crypto currency bridge for trade and remittances.
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