In an attempt to become a crypto hub, the UAE Central Bank has launched a CBDC strategy for a convenient payment mechanism.
Keeping in mind its goals of becoming a crypto hub, the UAE has announced the launch of a strategy for its central bank digital currency. The UAE Central Bank took the initiative, partnering with R3 and G42 Cloud to implement the ‘Central Bank of the UAE Central Bank Digital Currency (CBDC) Strategy.’ The strategy comes within the central bank’s Financial Infrastructure Transformation (FIT) Programme.
Announcing the same in an official press release, the Governor of the UAE Central Bank, Khaled Mohamed Balama, said, “CBDC is one of the initiatives as part of the CBUAE’s FIT 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 first phase of the strategy included three aspects, which included the development of a mBridge for cross-border CBDC payments. The UAE had also signed an MoU with one of its top trading partners, India, recently, for which proof of concept work for CBDC bridges with the country would also be included in the strategy. The CBDC strategy would also include proof of concept work for issuing CBDCs in the UAE domestically for both retail and wholesale purposes.
The press release further stated that the CBDC would help improve the country’s payment infrastructure, help build a seamless cross-border payment system, and make it a cashless society. It is also in line with making the country a crypto-friendly region.