RBI Governor Shaktikanta Das has stated that the feasibility of expanding RTGS to settle transactions in major trade currencies such as USD, EUR and GBP can be explored through bilateral or multilateral arrangements.
During his keynote address at the RBI@90 High-Level Conference organised by the Reserve Bank of India in New Delhi, Das noted that India is one of the few large economies with a 24×7 real time gross settlement (RTGS) system. India and a few other economies have already commenced efforts to expand linkage of cross-border fast payment systems both in the bilateral and multilateral modes.
India has developed a world-class digital public infrastructure (DPI), which has facilitated the development of high-quality digital financial products with enormous potential for cross-border payments. India is now home to the world’s third most vibrant startup ecosystem, with over 1,40,000 recognised startups, more than a hundred unicorns, and over $150 billion in funding raised. India’s experience in DPI can be leveraged by other countries to improve and usher in a global digital revolution.
Central Bank Digital Currency (CBDCs) is another area which has the potential to facilitate efficient cross-border payments. India is one of the few countries that have launched both wholesale and retail CBDCs. Programmability, interoperability with the UPI retail fast payment system and development of offline solutions for remote areas and underserved segments of the population, are some of the value-added services which the regulator is now experimenting as part of its CBDC pilot.
The RBI Governor noted that going forward, harmonisation of standards and interoperability would be important for CBDCs for cross-border payments and to overcome the serious financial stability concerns associated with cryptocurrencies. “A key challenge could be the fact that countries may prefer to design their own systems as per their domestic considerations. I feel we can overcome this challenge by developing a plug-and-play system that allows replicability of India’s experience while also maintaining the sovereignty of respective countries,” Das added.