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The government’s CBDC initiative includes one of the financial partners in the cross-border remittance service.
Singapore has become a new destination for the unified payments interface (UPI), India’s national payment network. the interoperability of Singapore and India through their respective fast payment systems, PayNow and UPI. The service was inaugurated by Mr. Ravi Menon, managing director of the Monetary Authority of Singapore, and Shri Shaktikanta Das, governor of the Reserve Bank, through token transactions utilizing the UPI-PayNow connection.
Users from the two countries will be able to transmit money rapidly across borders thanks to the combination of UPI and PayNow. A UPI-id, mobile number or Virtual Payment Address can be used to transfer or receive money from India for funds stored in bank accounts or e-wallets (VPA). Due to UPI’s rapid real-time payment technology, cash may be sent between the two bank accounts instantly using a smartphone interface.
The State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will first enable outgoing remittances, while Axis Bank and DBS India will initially facilitate incoming remittances. Users in Singapore will be able to use the service thanks to DBS-Singapore and Liquid Group (a non-bank financial institution).
Another participant in the national digital currency scheme is the private sector bank of India, ICICI Bank. India’s CBDC pilot program was introduced in two stages: in November for the wholesale sector and in December for retail customers. The digital rupee pilot project has recorded 770,000 transactions involving eight banks since the trial’s start on December 1st, 2022. Nine other cities may soon join the study in addition to the five cities that are now taking part.
CEO of Indian cryptocurrency exchange Unocoin, Sathvik Vishwanath, told Cointelegraph:
“This is a great value addition for India’s payment rails given that there is close to 30% population in Singapore are ex-pats and they send money to India once a month or a quarter. This integration eliminates friction reducing the processing time and costs.”
With the introduction of Covid-19, India’s digital payment infrastructure has grown significantly over the past several years. Despite having reservations about the whole crypto sector, the government decided to tax cryptocurrency earnings at a rate of 30%, forcing many significant players to leave the country. The government is eager to use blockchain technology for its CBDC program, and the infrastructure already in place may help it scale its digital CBDC experiment.
