As the country strives to become a regional financial center, the Central Bank of UAE has unveiled its strategy for using digital currencies as part of its Financial Infrastructure Transformation initiative.
The bank inked new agreements with cloud computing firm Group 42 Cloud and financial digitization supplier R3 to provide the necessary infrastructure and technology for implementing cyber cash.
The strategy’s first phase is expected to be completed in a year. It will have three key pillars, including the soft launch of mBridge, which makes it easier for international central banks to deal in actual value digital currencies.
The second pillar entails developing a proof-of-concept for bilateral digital currency bridges with India, one of the UAE’s main trading partners; the third portion demonstrates the effectiveness of domestic issuance in the wholesale and retail sectors.
“Central bank digital currency is one of the initiatives as part of the Central Bank’s FIT program, which will further position and solidify the UAE as a leading global financial hub,” said Khaled Balama, Governor of UAE Central Bank.
The FIT program is a group of nine projects designed to assist the UAE in developing into a major financial hub in the region. Three phases will comprise the program’s implementation, which will be finished by 2026.
By enabling digital money, introducing a domestic card program, and developing an instant payment network, the program’s first phase intends to strengthen the UAE’s financial industry.
“The launch of our digital currency strategy marks a key step in the country’s evolution of money and payments. Central Bank Digital Currency will accelerate our digitalization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society,” Balama said.