In addition to its offline capabilities, the Reserve Bank of India is assessing the potential of Central Bank Digital Currencies (CBDCs) for cross-border transactions and integration with the legacy systems of other nations.
By exploring the possibilities of CBDCs, RBI is looking to revolutionize the way international payments are made, making them faster, more secure, and more cost-effective.
India's recently launched in-house central bank digital currency (CBDC) - the digital rupee - is now being tested for offline functionality, as revealed by Ajay Kumar Choudhary, Executive Director of the Reserve Bank of India (RBI).
The RBI, India's central bank and regulatory body, launched the wholesale segment pilot for the digital rupee on November 1, 2022, onboarding 50,000 users and 5,000 merchants for real-world testing. By February 25, commercial CBDCs had processed about $134 million and 800,000 transactions.
Choudhary said the RBI is investigating the CBDC's offline capability as a way to build on this development. He told CNBC TV18 that the RBI is evaluating the CBDC's potential for international trade and integration with heritage systems in other nations. Added him:
"The involvement of the private sector and fintech in CBDC is something we are anxiously anticipating. We are sure that they will be a huge help, particularly with offline and international CBDC transactions."
Moreover, speaking on behalf of the Reserve Bank of India (RBI), Choudhary stated that the Central Bank Digital Currency (CBDC) would soon become the medium of exchange and require all the features of physical currency, including the anonymity.
India’s motivation for launching the CBDC was to improve regional financial inclusion and drive the digital economy forward. Choudhary also informed CNBC TV18 that the CBDC would eventually serve as a substitute for cryptocurrencies.
On February 21, India’s national payment network, the Unified Payments Interface (UPI), extended its services to Singapore, furthering its mission to provide a secure and efficient payment system.
The UPI PayNow integration enables citizens of India and Singapore to transfer money across borders quickly and securely. Initially, four major Indian banks - State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank - will facilitate outgoing remittances, while Axis Bank and DBS Bank India will facilitate incoming remittances.
Singapore's DBS Bank and Liquid Group will provide the service to users in the region, allowing them to take advantage of the convenience and speed of UPI PayNow.
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