RBI in talks with central banks of four to five countries on CBDC

The move is expected to bring down the cost of remittances and reduce checks on cross-border transactions

The Reserve Bank of India (RBI) is in talks with the central banks of four to five countries, including Asian and advanced economies in Europe, to develop cross-border central bank digital currency (CBDC) transaction rails for both wholesale and retail transactions, according to sources aware of the development.

 

This is expected to significantly reduce the cost of remittances and the checks currently in force at various levels on cross-border transactions, thus making them affordable, efficient, and faster, sources said. This is especially significant for India, which sees large-scale remittance inflows, where the cost can be significantly reduced, they added.

 

India is a leading recipient of inward remittances. A big part comes from the United States (27.7 per cent of gross inflows), followed by the United Arab Emirates (19.2 per cent), the United Kingdom (10.8 per cent), Saudi Arabia (6.7 per cent), and Singapore (6.6 per cent), according to a report by IDFC First Bank.

 

According to the RBI data, Indians living abroad sent over $107 billion so far in 2025-26 (FY26). They had remitted more than $132 billion — a record high — last financial year. In FY24, it was a little over $117 billion.

 

While the RBI has been piloting various use cases of the CBDC in both retail and wholesale segments, it has not been launched at full scale as the central bank is taking a cautious approach. It will continue working with countries to develop CBDC rails for cross-border transactions, sources added. 

 

The RBI has been consistent with its stance that it is in no hurry to launch the CBDC, as its most promising use case — cross-border payments — depends on other countries rolling out their own CBDCs simultaneously for the system to work effectively.

 

The RBI began a pilot of the CBDC wholesale segment in November 2022, and of retail CBDC in December that year. Recently, the central bank said the number of retail CBDC transactions had crossed 120 million, with the total value exceeding ~28,000 crore so far.

 

The RBI has said that the progress on the retail CBDC pilot is broadly in line with expectations, with ongoing work focused on programmability, coordination with state and central governments, specialised products for banks, and enabling cross-border payments. Currently, a little over 8 million users have been using the CBDC.

 

A CBDC is a digital form of legal tender issued by a central bank. It is similar to sovereign paper currency but takes a different form, is exchangeable on a par with an existing currency, and will be accepted as a medium of payment, legal tender, and a safe store of value. CBDCs appear as liabilities on a central bank’s balance sheet.

 

The RBI has been the biggest advocate of the CBDC, especially for cross-border transactions, amid the rise of private digital currencies. The RBI has also repeatedly cautioned against crypto assets, including stablecoins, saying that central bank money must remain the ultimate settlement asset and the anchor of trust in the monetary system.

 

In its Financial Stability Report (FSR), released in December 2025, the RBI said it maintained a cautious stance on crypto assets, including stablecoins, prioritising sovereign digital infrastructure to safeguard monetary sovereignty amid global shifts and preserve financial stability. The central bank also strongly advocated that countries prioritise CBDCs over stablecoins to preserve trust in money and maintain financial stability.

 

Additionally, the RBI highlighted that CBDCs could achieve the benefits that stablecoins claimed to offer — efficiency, programmability, and instant settlement — but with the credibility and safety of central bank money.

 

“The RBI, therefore, strongly advocates that countries prioritise CBDCs over privately issued stablecoins to maintain trust in money, preserve financial stability and design next-generation payment infrastructure that is faster, cheaper and secure,” it said.

 

Back in October 2025, RBI Governor Sanjay Malhotra, speaking at the annual meeting of the World Bank Group and the International Monetary Fund (IMF) in Washington, urged several central banks to use and promote CBDCs rather than stablecoins to facilitate international payments.

 

“Unless other countries also adopt CBDC, we are not going to see the benefits of CBDC insofar as cross-border payments are concerned. So, I would urge all those present from central banks and other jurisdictions that we promote the CBDC, because this has huge advantages over stablecoins,” he had said.