On March 15, the apex bank of the United Arabs Emirates (UAE) penned a memorandum of association (MoU) with the Reserve bank of India to develop a unique digital currency. Following a heated debate concerning the central bank digital currency (CBDC), the two countries agreed to work together in launching proof-of-concept (PoC) programs for digital currencies. The team plans to conduct CBDC pilot tests together with the aim of improving cross-border trade.
Scope of the Memorandum of Association Report
Following a business engagement held in Abu Dhabi, the two apex banks agreed to invest their human and financial resources to examine the interoperability of the proposed CBDCs.
The legislators proposed that the CBDCs necessitate the two countries to deploy innovative technologies into the system to share crucial information on trade. In the impending CBCD development, India and UAE will engage in a seamless cross-border trade to address current socioeconomic concerns.
A UAE local news site report revealed that India and UAE would launch an online program whereby regulators share knowledge on research, policies, and emerging technologies.
Beyond this, the two countries agreed to jointly leverage their technologies and expertise to test their CDBC. The proposed CBDC trials aim at assessing the efficiency of trade exchanges between India and the UAE. Also, conducting the CBDC pilot test jointly will reduce the cost incurred during the experimentation.
Revolving around the March 15 MoU report, the Indian legislators have conducted CBDC trials since 2022. The country plans to develop a release of its CBDC before the end of this year.
Furthermore, the collaboration aims at pushing the mainstream adoption of crypto assets within the Middle East and North Africa (MENA) region.
India’s Partnership with UAE
Before this, India and UAE had signed an economic partnership agreement to address the current macroeconomic impulses. During the March 15 event, the two countries launched the UAE chapter to strengthen their economic ties.
A review of the UAE chapter encourages Indian investors to pursue new opportunities within the Arab region. Also, the UAE business will mutually benefit the Indian markets.