The Reserve Bank of India (RBI) aims to enhance its cross-border payments system to enable instant settlements by incorporating new trading partners across Asia and the Middle East. Currently, India has agreements with Sri Lanka, Bhutan, and Nepal, with plans to include the United Arab Emirates in its cross-border payment initiative. The RBI is also considering the use of central bank digital currencies (CBDCs) for these transactions. As of now, India's CBDC operates strictly as a bank-to-bank solution, with the prospect of extending it to retail consumers in the future, although no specific timeline is set. India, a strong advocate for CBDCs alongside BRICS nations like China and Russia, has been testing its digital currency since 2020. The RBI governor has highlighted efforts to broaden the digital rupee's reach, particularly in rural areas lacking reliable internet, and emphasized the importance of a flexible system that supports transactions across various platforms. However, criticisms from privacy advocates regarding centrally controlled digital currencies remain significant, highlighting concerns about possible government abuse.

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