Government, RBI in discussion with South Asian countries for cross-border rupee trade: Shaktikanta Das

The RBI Governor also said the central bank digital currency (CBDC) is in trial phase and the RBI is moving very carefully and cautiously on digital rupee launch.

RBI Governor Shaktikanta Das on January 6, 2023 said the government and the central bank are in discussion with South Asian countries to have cross-border trade in rupee.

He also said the central bank digital currency (CBDC) is in trial phase and the RBI is moving very carefully and cautiously on digital rupee launch.

"For UPI, we have already entered into agreements with countries in this region, for example, with Bhutan and other countries like Nepal and we are trying to provide the UPI facility to make cross-border payments much easier in this region...

"The other initiative is the RBI, together with the Government of India, have initiated rupee settlement of international trade. We are already in discussion with some of the countries in this region and to facilitate rupee settlement of cross border trade in the South Asian region," Mr. Das said.

In his keynote address at an IMF conference in New Delhi, the Governor also said that the RBI has launched a pilot project of CBDC.

"It's in a trial phase, we are moving about it very carefully, very cautiously because this is something where the approach has to be very cautious, very careful. If there is cloning or anything which happens, it can be very, very risky... So that could be another area where there can be room for cooperation (between South Asian countries)," Mr. Das said.

After the successful launch of the pilot for the wholesale segment on November 1, 2022, the Reserve Bank of India (RBI) on December 1, last year, began its retail CBDC pilot project.