Cross-border payments can be made efficient via CBDCs: Das
New Delhi: The Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said that cross-border payments can be made more efficient through adoption of digital currencies. “The empirical data that we are generating would go a long way in shaping the policies and future course of action. With its instant settlement feature, I believe, CBDCs (central bank digital currencies) can play an important role in making cross-border payments cheaper, faster and more secure," he said at the G20 TechSprint 2023.
The RBI had started pilot testing CBDCs last year in both wholesale and retail segments. It is aiming to scale up the number of central bank digital currency (CBDC) transactions to one million per day by the end of 2023. Currently, around 5,000-10,000 transactions are being done per day using retail CBDC.
In his speech, Das also advocated the need for technology solutions in forex and liquidity to enable settlement in emerging market currencies. “The use of local currencies in cross-border payments can help to shield the EMDEs (emerging market and developing economies) from global shocks, protect against exchange rate fluctuations and encourage the development of local forex and capital markets. Multilateral payment platforms that support multiple currencies would offer a way to promote such local-currency payments," he added.
Das also stressed the need to integrate AML/CFT (anti-money laundering/countering financing of terrorism) technology solutions into multilateral platforms to reduce the risks of illicit finance. He quoted data from the United Nations Office on Drugs and Crime (UNODC) which pegs global money laundering at 2-5% of global GDP, which is about $800 billion to $2 trillion. Other estimates place this
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