The Central Bank of the UAE (CBUAE) and Bank Indonesia (BI) have signed a Memorandum of Understanding (MoU) to enhance bilateral cooperation in payment systems.

This agreement was part of a visit to the UAE by Indonesian President Joko Widodo.

The MoU was signed by Khaled Mohamed Balama, Governor of the CBUAE, and Perry Warjiyo, Governor of BI.

It builds on a previous MoU from November 2023, which facilitated cooperation in payment systems and digital innovation, and supported the use of local currencies in bilateral transactions.

The new MoU aims to link the payment systems of the two countries, promoting faster, more efficient, transparent, and affordable cross-border payments.

It will establish a joint risk management mechanism, regulatory cooperation, and protect user rights in compliance with each country’s laws.

The next step in the partnership involves creating a cooperation framework for local currency transactions (LCT) and payment systems, starting with Quick Response (QR) payments.

Once implemented, the cross-border QR payment linkage will use direct local currency exchange rate quotations from appointed cross-currency dealer (ACCD) banks.

This approach aims to make cross-border payments between Indonesia and the UAE cheaper, faster, more inclusive, and transparent,

His Excellency Khaled Mohamed Balama, Governor of the CBUAE, said

“Today, we are presented with an important opportunity to bolster our cooperation with Bank Indonesia across all financial and banking fields, including financial technology, innovation, and digital payments.

 

This reinforces our wider efforts to support the UAE’s objective of becoming a leading global hub for financial technology and digital and cross-border payment solutions.”

Perry Warjiyo, Governor of BI, said

“The cooperation in the payment system area will not only strengthen our efforts to promote the digital economy and finance in Indonesia and the UAE but also open up new possibilities and opportunities.

 

Through this cooperation, the potential for conducting cross-border payments between the two countries under the local currency transaction framework, which is scheduled to be operationalised in 2024, is a promising prospect.”

This article first appeared on fintechnews.sg

Featured image credit: Edited from Freepik