India, Russia Mull Switch To Digital Currencies For Cross-Border Trade Payments

India and Russia are likely considering settling their trade using their respective central bank digital currencies or CBDCs, per a media report.

What Happened? “Trade settlement in digital currency is the medium-term plan for trade with Russia,” said a source speaking to The Informist.

The Reserve Bank of India has already launched pilot projects for the digital rupee in the wholesale and retail segments. Finance Minister Nirmala Sitharaman said in March that a total of ₹126 crore worth of wholesale e-rupees and ₹4.14 crore of retail e-rupees were in circulation since their launch in November and December, respectively.

A Russian bank official told The Informist that Russia is expected to launch a pilot of the digital rouble — Russia’s CBDC, this month.

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The source also mentioned that a trade settlement with Russia in digital currency is quite likely, and that “the government will allow the use of central bank digital currency for cross-border payments beyond a certain threshold value. So, trade can be settled using digital currency according to the exchange rate of the day.”

According to a separate report by the Bank for International Settlements, wholesale central bank digital currency is similar to today’s central bank reserves and is intended for the settlement of large inter-bank payments.

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