India, UAE building digital currency bridge

crore since its 2022 launch, central bank data till December showed.

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While retail CBDC can be used to pay other users, as well as merchants for goods and services, wholesale use cases include interbank settlements and large-value transactions.

Data on wholesale transactions is not readily available.

‘The UAE linkage is important because of its status as one of the largest sources of inward remittances for India.

‘The UAE, home to the emirates of Dubai, Abu Dhabi and Sharjah, lost the top spot to the US in remittances in recent years, but still accounts for 19.2% of remittances into the world's fourth-largest economy.

Emirates entities like LuLu Group, DP World and Emaar Properties operate significant businesses in India, while Indian conglomerates such as Larsen & Toubro, Tata Group and Reliance Industries have large operations in the UAE.

The Central Bank of the UAE issued the first Digital Dirham as legal tender in 2024.

The RBI's FY25 annual report had said it was “exploring commencement of CBDC pilots on cross-border payments both on a bilateral and multilateral basis”, in its annual report.