The Reserve Bank of India is in discussion with its counterparts in the United States and Hong Kong, along with the Society for Worldwide Interbank Financial Telecommunications (SWIFT), on cross-border digital bank payments or central bank digital currencies (CBDC). Discussions between the bank regulators are exploring the feasibility of fast, low-cost digital cross-border financial transactions. An internal RBI working group is actively studying the technological aspects to create a roadmap for direct cross-border transactions between countries.

CDBC has the potential to revolutionise cross-border settlements, particularly in the context of Swift-facilitated transactions. Current practices involve routing funds through banks using the Swift platform. CBDCs could enable direct settlements between parties, offering advantages such as speed and cost-efficiency. The move aligns with India's recent agreements for real-time cross-border fund transfers with countries like Singapore and the UAE.

The reserve bank has also been looking into methods to increase CBDC adoption in India. The RBI, along with the National Payments Corporation of India (NPCI) aims to streamline CBDC usage, making digital payments as straightforward as traditional cash transactions.

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