Tech turns the new currency for forex trade

‘The shifting sands of geopolitics have put the role of currency settlement in sharp focus.

- KRANTI NATION PRANJAL SHARMA

As trade relationships evolve and change, nations are using a wider basket of currencies. Though the dollarand euro remain important, economies like India, China, Russia and the United Arab Emirates are increasing trade with other currencies.

State-owned Indian Oil recently paid in Chinese Yuan to purchase Russian oil, according to reports. Finance Minister Nirmala Sitharaman has promised a real-time foreign currency settlement system. The new system will use emerging technologies to complete transactions instantly — a process that typically takes about 36-48 hours.

Technologies like artificial intelligence (Al) and blockchain are modernising foreign exchange markets. With the growth of international trade and rising volumes of currency exchange, the demand for robust, efficient and transparent forex settlement systems is more pressing than ever. Historically, forex settlements have faced challenges such as inefficiencies, payment delays, and counterparty risk. However, technological advancements are reshaping this space.