The central bank in the United Arab Emirates said it has
started implementing its digital currency strategy with partners G42
Cloud and R3. According to the central bank, the digital currency
initiative is expected to “further position and solidify the UAE as a
leading global financial hub.”
CBDC Strategy to Focus on Three Pillars
The United Arab Emirates (UAE) central bank recently said it would
start implementing its digital currency strategy with its two partners
G42 Cloud and R3. According to a report, the UAE’s apex bank’s two
partners are expected to play a key role in helping the central bank
achieve CBDC implementation.
As explained in a recent Arabian Business report,
the first phase of the central bank’s strategy, which is expected to
take place in the next 12 to 15 months, will focus on three key pillars.
The proof-of-concept work for bilateral central bank digital currency
(CBDC) bridges with India, as well as the soft launch of the M-bridge,
are two of the key pillars. The proof-of-concept work for domestic CBDC
issuance covering wholesale and retail usage is the third key pillar
that will be considered.
Commenting on why the Central Bank UAE (CBUAE) has chosen to proceed
with its CBDC initiative, the bank’s governor Khaled Mohamed Balama
touted this as a move that likely bolsters the country’s position as a
leading global financial hub. He also suggested the implementation of
the CBDC will likely promote financial inclusion.
“CBDC is one of the initiatives as part of the CBUAE’s FIT [Financial
Infrastructure Transformation] programme, which will further position
and solidify the UAE as a leading global financial hub. The launch of
our CBDC strategy marks a key step in the evolution of money and
payments in the country. CBDC will accelerate our digitalisation journey
and promote financial inclusion. We look forward to exploring the
opportunities that CBDC will bring to the wider economy and society,”
the governor said.
Prior to its latest CBDC announcement, the CBUAE engaged in several
digital currency initiatives including its collaboration with the Saudi
Central Bank in 2020. The bank’s other initiatives include its
cross-border CBDC pilot with the Hong Kong Monetary Authority and the
Bank of Thailand in 2022. The Digital Currency Institute of the People’s
Bank of China, and the Bank for International Settlements were also
part of this initiative, the report added.
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