India Explores Cross-border CBDC Payments with Central Banks
BITmarkets Team
Jul 06, 2023
The Reserve Bank of India (RBI) is engaged in discussions with central banks from 18 banks around the world on the possibility of cross-border payments through the nation’s central bank digital currency (CBDC).
India’s digital rupee represents quite the significant driver in bolstering the country’s foreign trade infrastructure, as this is what RBI Governor Shaktikanta Das had to say, according to an Economic Times report on June 27:
“But cross-border payments will also become much quicker, more seamless and very cost-effective. That is another area where a lot of attention needs to be given. We are constantly in dialogue with other central banks that have introduced or are introducing CBDCs.”
The central bank of India is adamant to leverage its foreign trade capabilities. Das has also highlighted the nation’s willingness to launch a CBDC as a payment method for importing Indian goods for countries which face United States dollars supply difficulties:
“In India, we have no shortage of dollars, but in some other markets, due to a shortage of dollars, they are unable to do imports.”
Among the other reasons for launching the digital rupee is also to help save the supply of U.S. dollars in the country:
“In the ‘taper tantrum’ period, suddenly, India had an external sector crisis, and the RBI had to attract foreign inflows by offering some incentives. We did not want to have a repeat of that situation,” Das stated.
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