Now Reading: RBI explores CBDCs, payment links to cut cross-border costs
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RBI explores CBDCs, payment links to cut cross-border costs
India co-chaired the BRICS finance ministers and central bank governors meeting in Jaipur on August 12-13, where RBI Governor Sanjay Malhotra stressed the need for cheaper and faster cross-border payments. Separately, Malhotra…
The Story in Brief
India co-chaired the BRICS finance ministers and central bank governors meeting in Jaipur on August 12-13, where RBI Governor Sanjay Malhotra stressed the need for cheaper and faster cross-border payments. Separately, Malhotra said the RBI is exploring central bank digital currencies (CBDCs) and payment system linkages to reduce costs, particularly for retail transactions.
The RBI has proposed placing CBDC linkages of BRICS countries on the agenda for the 2026 BRICS summit, which India will chair. The central bank is also signing MoUs to promote local currency trade, with four agreements already signed with the UAE, Mauritius, Maldives and Indonesia. Malhotra asked why cross-border remittances should take days when UPI is instantaneous.
The Indian Opinion
The RBI's push for CBDCs and local currency trade is sensible, but the narrative that this will quickly challenge the dollar's dominance is overblown. Volumes are tiny, and infrastructure takes years. Equally, dismissing the effort as pointless ignores India's success with UPI. The real test will be whether the BRICS 2026 summit produces a working cross-border CBDC pilot, not just agenda items.
Sources (2): bfsi.economictimes.indiatimes.com, timesnownews.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
