The Central Bank of the United Arab Emirates, together with its partners G42 Cloud and R3, announced that it has begun implementing a digital currency strategy. According to the central bank, the digital currency initiative is expected to “further position and solidify the UAE as a leading global financial hub.”
The CBDC strategy
focuses on three pillars.
The Central Bank of the United Arab Emirates (UAE) recently announced that it will begin implementing a digital currency strategy with two partners, G42 Cloud and R3. According to reports, the two UAE central bank partners are expected to play a key role in helping the central bank achieve CBDC implementation.
As explained in a recent Arabian Businessreport, the first phase of the central bank’s strategy, which will take place over the next 12-15 months, will focus on three key pillars. Proof-of-concept work for the bilateral Central Bank Digital Currency (CBDC) bridge with India and the soft launch of the M Bridge are two of the key pillars. Proof-of-concept work for a domestic CBDC issuance covering wholesale and retail is the third important pillar to be considered.
Commenting on the UAE Central Bank’s (CBUAE) decision to move forward with the CBDC initiative, Khaled Mohammed Balama, the bank’s governor, said that it is a move that will strengthen the UAE’s position as a leading global financial hub. He also suggested that the implementation of CBDC will likely promote financial inclusion.
“CBDC is part of the CBUAE’s Financial Infrastructure Transformation (FIT) program, an initiative to further position and solidify the UAE as one of the world’s leading financial hubs. “The launch of the CBDC strategy is an important step in the evolution of money and payments in the UAE, and CBDC will accelerate our digitalization journey and promote financial inclusion, and I look forward to exploring the opportunities CBDC brings to the broader economy and society,” said the governor.
Prior to this CBDC announcement, CBUAE is working on several digital currency initiatives, including a collaboration with the Central Bank of Saudi Arabia in 2020. It is also working on other initiatives, including a cross-border CBDC pilot with the Hong Kong Monetary Authority and the Bank of Thailand in 2022. The People’s Bank of China’s Digital Currency Institute and the Bank for International Settlements were also part of the initiative, the report adds.
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