The Reserve Bank of India (RBI) is currently in dialogue with its counterparts in at least 18 other countries about the possibility of cross-border payments in the "digital rupee."
The report on RBI's ambitious foreign trade plans for the Indian central bank digital currency (CBDC), appeared in the Economic Times on June 27. He cites various public announcements by RBI Governor Shaktikanta Das.
During his June speech in London, Das stressed the importance of foreign trade infrastructure for the "digital rupee", which was due to reach 1 million users nationwide by early July:
โBut cross-border payments will also be much faster, smoother and more cost-effective. That is another area where close attention should be paid. We are constantly in dialogue with other central banks that have introduced or are introducing CBDCs.โ
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According to the report, banks in 18 countries have already opened vostro accounts in rupees since July 2022. In his other public appearance, Das explained India's eagerness to provide its CBDC as a payment method to import Indian goods for countries struggling with the supply of US dollars. :
"In India, we don't have a shortage of dollars, but in some other markets, due to a shortage of dollars, they can't import."
Another reason to bet heavily on the digital rupee for foreign trade agreements is the intention to save the country's dollar reserves:
โIn the 'gradual tantrum' period, suddenly India had an external sector crisis and the RBI had to attract foreign flows by offering some incentives. We didn't want that situation to happen again."
The RBI launched its wholesale digital rupee pilot project in November 2022 and a Retail Digital Rupee Pilot Project in February 2023. In March he announced an agreement with the Central Bank of the United Arab Emirates to study a CBDC bridge for trade and remittances.
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