The Central Bank of the UAE (CBUAE) and Bank Indonesia (BI) have signed a Memorandum of Understanding (MoU) aimed at establishing a framework for enhancing bilateral cooperation in the field of payment systems. The MoU comes within the framework of the recent visit to the UAE by His Excellency Joko Widodo, President of the Republic of Indonesia.
The MoU was signed by His Excellency Khaled Mohamed Balama, Governor of CBUAE, and Perry Warjiyo, Governor of BI. It follows on from an earlier MoU exchanged between the two on 29 November 2023, which facilitated further cooperation and information sharing in various fields including payment systems and digital innovation. This MoU also complements the cooperation for wider use of local currencies in bilateral transactions through the Local Currency Transaction Framework.
The MoU aims to link payment systems between the two countries to facilitate faster, more efficient, transparent and affordable cross-border payments, ultimately supporting the economic development of both nations. It will establish a joint mechanism for robust risk management, facilitate regulatory cooperation and protect the rights and interests of users in accordance with applicable laws and regulations in each country.
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His Excellency Khaled Mohamed Balama, Governor of CBUAE, said: “This MoU embodies the growing economic partnership between the UAE and Indonesia. It is an important pillar that aims to support bilateral relations in the areas of trade and investment and strengthen the UAE’s role in global trade. Today, we are presented with an important opportunity to strengthen our cooperation with Bank Indonesia across all areas of finance and banking, including fintech, innovation and digital payments. This reinforces our broader efforts to support the UAE’s goal of becoming a leading global hub for fintech and digital and cross-border payment solutions.”
BI Governor Perry Warjiyo said: “Cooperation in the field of payment systems will not only strengthen our efforts to promote the digital economy and finance in Indonesia and the UAE, but will also open up new possibilities and opportunities. Through this cooperation, the potential to carry out cross-border payments between the two countries under the local currency transaction framework, which is scheduled to be operational in 2024, is a promising prospect. BI and CBUAE will continue to move forward together with a unified spirit to achieve our shared goals, especially in the payment system, for the prosperity of our economies.”
The MoU aims to link payment systems between the two countries to facilitate faster cross-border payments.
“The next step is for the two central banks to work together to create a framework for cooperation on LCTs and payment systems, starting with Quick Response (QR) payments. Once LCTs and the QR framework are in place, the cross-border QR payments connection will use direct local currency exchange rate quotes from Appointed Cross Currency Dealer (ACCD) banks. This innovative approach aims to make cross-border payments between Indonesia and the UAE cheaper, faster, more inclusive and transparent. More importantly, it is set to play a key role in promoting the digital economy and finance in both countries, marking a significant step towards a more interconnected and efficient financial landscape,” he concluded.
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