India’s national payment network, the unified payments interface (UPI), has expanded beyond its borders by integrating with Singapore’s PayNow rapid payment system, with one of the banking partners in the cross-border remittance service also involved in India’s CBDC program. Governor of the Reserve Bank of India, Shaktikanta Das, and Managing Director of the Monetary Authority of Singapore, Ravi Menon, launched the service using token transactions through the UPI-PayNow linkage.
The UPI-PayNow integration allows users from India and Singapore to quickly send money across borders using just a UPI-id, cellphone number, or virtual payment address. The real-time payment system of UPI facilitates instant transfers of cash through a mobile interface between two bank accounts.
Initially, the State Bank of India, Indian Overseas Bank, Indian Bank, and ICICI Bank will facilitate outgoing remittances while Axis Bank and DBS Bank India will facilitate incoming remittances. Meanwhile, DBS Bank and Liquid Group will provide the service to users in Singapore.
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The expansion of the national payment network is expected to have a positive impact on the cryptocurrency industry as it will help to eliminate friction, reduce processing time, and lower costs. However, the Indian government remains skeptical about cryptocurrencies and has imposed a 30% tax on crypto gains, leading some major players to move out of the country. Nevertheless, the government is keen on utilizing blockchain technology for its CBDC program, with the existing infrastructure helping to scale the program.
