India and the United Arab Emirates (UAE) will collaborate on central bank digital currencies (CBDCs) by jointly conducting pilot(s), according to an announcement on Wednesday.

The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) signed a Memorandum of Understanding (MoU) in Abu Dhabi. The central banks will explore interoperability between the CBDCs of the two nations.

The banks will also "jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade," the announcement said.

India has been conducting a retail CBDC pilot which was recently extended to 15 cities, more than 50,000 customers, and 10,000 merchants and eyes the launch of a full-scale CBDC (retail) by the end of 2023.

(By Amitoj Singh)